Alibaba Group Holding Ltd. plans to buy at least 10 percent of Yunda Holdings Ltd., making it the fifth investment by e-commerce giant Alibaba into a large courier company, according to two people familiar with the matter, according tomedia reports.
Alibaba wants to buy shares from Yunda’s ruling shareholders, founders Yu Tengyun and Chen Liying, who own 52.19 per cent of Yunda through its wholly-owned Shanghai Rogers Investment Management, according to a person familiar with the matter. At current market prices, Alibaba’s stake will cost at least $790m.
Another person familiar with the matter said Alibaba’s upcoming yunda stake could exceed 10 per cent, up to a maximum of 15 per cent. The two sources, who were not authorized to disclose information to the media, were determined to reveal their identities.
Chinese regulatory rules state that when a domestic listed company trades more than 5 per cent of its shares, it can be sold at a 10 per cent discount on the company’s share price on the last trading day before the transaction. Based on Monday’s closing price, Alibaba’s deal with Yunda will be worth at least $790m, giving it a market value of about $8.78bn.
Alibaba had previously acquired a small stake in Yunda, but the acquisition was below the disclosure threshold, so the two companies did not disclose the deal, two people familiar with the matter said.
Alibaba was for not the other. Yunda did not respond to a request for comment.
Alibaba’s move marks another step forward in the company’s attempt to gain a greater say in China’s more fragmented but fast-growing delivery market.
Data released by the State Post Office in January showed that domestic couriers shipped 63 billion parcels last year, up 24 per cent from 2018, and revenues rose 23 per cent year-on-year to Rmb745bn ($104.95bn).
However, with the continued growth of online retailing and the continued price competition, many courier companies are under greater pressure, mainly from strengthening logistics infrastructure and upgrading their services to maintain their market share.
A year ago, Alibaba bought a 14.65 percent stake in Shentong Express for Rmb4.66bn.
Subsequently, Shentong’s ruling shareholders also agreed to grant Alibaba the right to buy a further 31.25 percent of Shentong over the next three years.
Before investing in Shentong, Alibaba also acquired minority stakes in three other large Chinese courier companies, Yuantong, Baishi and Zhongtong.
Shanghai-based Yunda, which went public in 2016, is one of several courier companies that partner edges Alibaba through Rookie. In 2013, Alibaba set up the logistics division of Rookie. In this partnership, rookieist is responsible for providing software and sharing data with warehouses, distributors and other logistics agencies to provide logistics services to Tmall and Taobao consumers.