The most critical restructuring decision in history from Alibaba

Chinese e-commerce company Alibaba Group Holding Ltd. is going for the largest restructuring in its 24-year history.

In the statement made by the company, there was information that Alibaba, which plans to divide its 220 billion dollar empire into six units, will also evaluate the public offering of the companies in question.

The six units include Cloud Intelligence Group, Taobao Tmall Trading Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group, and Digital Media and Entertainment Group, the statement said. On the other hand, it was noted that each of the six companies will have its own CEO and board of directors.

Alibaba’s announcement on Tuesday coincided with the return of the company’s billionaire co-founder, Jack Ma, to China after more than a year.

Shares of the company rose 8 percent in pre-market trading in New York after this news.

Stating that this structuring is rare for large Chinese technology companies, analysts think that the strategy in question will set an example for other Chinese companies.

Investigations by Chinese President Xi Jinping’s administration have erased more than $500 billion in Alibaba’s value, but the latest restructuring announced by Alibaba was perceived as a strong signal that the company is ready to reach investors and markets.

The company’s public offering on the Hong Kong and Shanghai Stock Exchanges was halted.

Ma, the founder of Alibaba, mysteriously disappeared and did not appear in public for a long time after he gave a speech criticizing market regulators and public banks in China in October 2020.

After the incident, the bilateral public offering of Ant Group, which brings together Alibaba’s internet payment service Alipay and its related assets under the same roof, planned to be held on the Hong Kong and Shanghai stock markets in October 2020, expected to generate $39.7 billion in revenue, was halted by the government. .

The China Securities Regulatory Commission (CSRC) has stipulated that internet companies that dominate large amounts of user data must undergo a security investigation in order to go public abroad. China’s State Market Regulatory Authority (SAMR) targeted the country’s major internet companies such as Alibaba, Meituan, Baidu and Didi in its investigations it launched on the grounds of violating the antitrust law. SAMR fined Alibaba a record $2.8 billion in a monopoly investigation in April 2021.

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