Chinese technology giant Alibaba (BABA) says it plans to split into six new business groups and plans to explore initial public offerings (IPOs) for each one of them.
Alibaba says the split represents the most significant reorganization in its history and comes a day after company founder Jack Ma returned to China after living abroad for more than a year.
Each business group will be managed by its own chief executive officer (CEO) and have separate boards of directors, said Alibaba in a written statement.
According to the Hangzhou, China-based company, the break-up is designed to unlock shareholder value and spur greater competitiveness.
Alibaba is looking to reignite growth after enduring a crackdown by the Chinese government and regulators that depressed its share price and wiped billions of dollars from its market capitalization.
The new business groups are as follows:
• Cloud Intelligence Group: Alibaba CEO Daniel Zhang will be head of this business, which will house the company’s cloud and artificial intelligence units.
• Taobao Tmall Commerce Group: This unit will cover the company’s online shopping platforms, including Taobao and Tmall.
• Local Services Group: Yu Yongfu will be CEO and the business will cover Alibaba’s food delivery service called Ele.me as well as its mapping systems.
• Cainiao Smart Logistics: Wan Lin will continue as CEO of this business unit, which houses Alibaba’s logistics service.
• Global Digital Commerce Group: Jiang Fan will serve as CEO. This unit includes Alibaba’s international e-commerce businesses such as AliExpress and Lazada.
• Digital Media and Entertainment Group: Fan Luyuan will be CEO of this unit that includes Alibaba’s streaming and movie business.
Alibaba said each unit can pursue its own IPO once ready to tap public markets. The one exception is the Taobao Tmall Commerce Group, which will remain wholly owned by Alibaba.
Alibaba’s stock has declined 25% over the last year to now trade at $86.12 U.S. per share.
Tech Insider
