Alibaba (BABA.US) announced yesterday that it will split its company into six units, each of which will have the ability to raise external financing and go public, as part of a reorganization of the Chinese e-commerce giant. Each business group will be managed by its own CEO and board of directors. Alibaba said in a statement that the move is "designed to unlock shareholder value and promote market competitiveness." As a result, Alibaba shares shot up more than 14% on the NYSE.
The move comes after a tough few years for Alibaba, which has faced a domestic economic slowdown and tighter regulation from Beijing. Alibaba has struggled with growth over the past few quarters. With the reorganization, this trend is set to change.
The business groups will be focused around the company's strategic priorities, which will be divided as follows:
Cloud Intelligence Group: Alibaba CEO Daniel Zhang will head this group, which will include the company's cloud and artificial intelligence projects.
Taobao Tmall Commerce Group: This will include the company's online shopping platforms, including Taobao and Tmall.
Local Services Group: Yu Yongfu will be CEO, and operations will include Alibaba-owned food delivery service Ele.me, as well as its mapping.
Cainiao Smart Logistics: Wan Lin will continue as CEO of this business, which houses Alibaba's logistics service
Global Digital Commerce Group: Jiang Fan will serve as CEO. This unit comprises Alibaba's international e-commerce divisions, including AliExpress and Lazada.
Digital Media and Entertainment Group: Fan Luyuan will be CEO of the unit, which includes Alibaba's streaming and movie business.
Each of these units may aim to raise funds independently and go public when ready, Zhang said.
The exception is Taobao Tmall Commerce Group, which will remain wholly owned by Alibaba.
Source: xStation
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