Market Overview

Alibaba Doubles Stake In Logistics Company YTO Express With $1B Investment

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Alibaba Doubles Stake In Logistics Company YTO Express With $1B Investment

Alibaba Group Holdings Ltd (NYSE: BABA) has increased its ownership interests in the Shanghai-headquartered logistics company YTO Express, the South China Morning Post reported Wednesday.

The tech titan –  often referred to as the Chinese version of Amazon Inc. (NASDAQ: AMZN), is the largest e-commerce platform in the country.

What Happened: Alibaba pumped in close to $1 billion to purchase a 12% stake in YTO, bringing its total stake to 22.5%, according to SCMP.

The two companies plan to make a collaborated effort in express deliveries, air cargo, setting up a global logistics network and supply chain, and working on digital technologies.

SCMP reported a similar event when Alibaba’s rival JD.com Inc. (NASDAQ: JD) made a $432 million investment in Kuayue Express in mid-August, granting it a controlling stake in the Chinese courier company.

Why It Matters: Reuters reported last week based on unnamed sources that Alibaba was in talks with YTO Express founders to secure an additional 30% stake. At the time, the e-commerce platform held around 10% ownership in the logistics company, which is roughly $0.7 billion.

In 2019, YTO held around 14% market share in China.

Price Action: After a 3.8% uptick during trading hours on Tuesday, Alibaba ADR gained an additional 0.1% in the extended trading hours to close at $298.

Photo courtesy: Thomas Lombard via Wikimedia

 

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