Alibaba to acquire 10% stake in Yunda from controlling shareholders
Category: #retail  By Saipriya Iyer  Date: 2020-04-02
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Alibaba to acquire 10% stake in Yunda from controlling shareholders

Alibaba Group Holding Limited, a Chinese multinational technology company, is reportedly planning to purchase nearly 10% stakes in Yunda Holding Co Ltd. This acquisition marks the e-Commerce company’s 5th investment in a large courier service company, which could eventually lead to gaining more share in the fragmented but rapidly rising express delivery industry in China.

The e-Commerce giant seeks to acquire the recent stakes from Nie Tengyun & Chen Liying, Yunda’s controlling shareholders. People with knowledge of the matter have stated that they own 52.19% of the Yunda share through Shanghai LuoJieSi Investment Management, their wholly owned firm.

This stake will be worth nearly $790 million, at the current market price. It is also possible that the company might go beyond acquiring 10% to purchase up to 15% stake in Yunda.

According to the regulations made in China, a stake of more than 5% in a domestically listed company on the last trading day before a deal can be sold at a discount of over 10% to the share price of the firm. As per the closing price on Monday, the agreement can lead to the procurement of over $790 million as Yunda has a market cap of nearly $8.78 billion.

The recent move comes along the heels of the company entering a 4.66 billion yuan deal in 2019, to acquire a stake of 14.65% in STO Express Co Ltd. Apart from this, it has obtained minority stake in three other Chinese couriers, including ZTO Express Inc., YTO Express Group Co. Ltd and Best Inc.

In 2019, domestic delivery firms have dispatched nearly 63 billion parcels, a hike of 24% from a year before, while they registered a revenue growth of 23% year-on-year, which amounts to $104.95 billion (745 billion yuan). However, many delivery companies are facing pressure to upgrade the logistic infrastructure and services due to the rising prevalence of online retail channel in the market.

Source credit:

https://www.deccanherald.com/business/business-news/alibaba-plans-to-buy-at-least-10-stake-in-chinese-courier-yunda-sources-819540.html



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Saipriya Iyer

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Saipriya Iyer

Saipriya Iyer develops content for Market Size Forecasters, Algosonline, and myriad other platforms. A computer engineer by profession, she ventured into the field of writing for the love of playing with words. Having had a previous experience of 3 years under her bel...

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