Alibaba to take control of loss-making delivery business Cainiao

Hong Kong

ALIBABA Group Holding Ltd will buy control of unprofitable delivery business Cainiao for 5.3 billion yuan (S$1.08 billion) and spend billions of dollars more to expand a shipping network that spans the world's largest e-commerce market.

China's largest web marketplace agreed to increase its stake in Cainiao Smart Logistics Network Ltd to 51 per cent. Under the deal, Alibaba plans to consolidate Cainiao's financials into its own books, eroding Alibaba's bottom line, and will get an additional seat on Cainiao's board, taking its representation to four out of seven seats, the company said in a statement on Tuesday.