Alibaba is one of the biggest e-commerce companies outside of China and it is arguably the biggest e-commerce company in China right now. Also, the fact that Alibaba’s arm Aliexpress ships a lot of products outside of China to all parts of the world contribute to a lot of its growth as well. However, these are uncertain times because of the COVID-19 outbreak which means economies all over the world are totally shut down right now. But it is quite interesting to note that China’s economy has started slowly but steadily and we are also seeing quite some acquisition reports already.
This could also be because of the fact that companies have lowered their valuation after the outbreak as they need funds and bigger players are taking advantage of the situation by investing cheaply and then capitalizing on their stake later on. Anyways, the report from Reuters cites its sources saying that Alibaba is planning to buy a 10% stake in Chinese courier company named Yunda. Also, it is said that this will be the fifth investment from Alibaba in a courier company in last few years.
This also means that the company is looking aggressively at options for their delivery service across China. It is also reported that the current market valuation of Yunda means that a 10% stake in the company would mean at least $790 million for Alibaba. It is also worth noting that under Chinese regulations, a stake of over 5% in a domestically listed company can be sold at a discount of as much as 10% to the firm’s share price on the last trading day prior to a deal.
Therefore, reports also mention that Alibaba could go beyond a 10% stake and eventually buy a 15% stake in the company as they are really interested in the acquisition according to people close to the matter.