02:24 PM EDT, 03/26/2024 (MT Newswires) -- Alibaba Group Holding ( BABA ) said Tuesday its Cainiao Smart Logistics Network unit has withdrawn its Hong Kong listing plans, with the move announced at the same time Alibaba ( BABA ) said it plans to acquire the remaining stake it doesn't already own in Cainiao for up to $3.75 billion.

The Chinese e-commerce giant said Cainiao had withdrawn its initial public offering and listing application on the Hong Kong Stock Exchange. Alibaba ( BABA ), which currently holds a roughly 64% stake in Cainiao, plans to offer the unit's minority shareholders an opportunity to sell all the outstanding shares for $0.62 each in cash.

"Alibaba Group ( BABA ) plans to align Cainiao's business to better realize strategic synergies with Taobao and Tmall Group and Alibaba International Digital Commerce Group, as well as support Cainiao to execute a long-term strategic expansion of its global logistics network," Alibaba ( BABA ) said in a statement.

Last month, the company reported that Cainiao's revenue jumped nearly 24% year over year to about 28.48 billion Chinese renminbi ($3.94 billion) for the quarter through Dec. 31. Alibaba ( BABA ) attributed the gain mainly to revenue from cross-border fulfillment solutions.

The IPO withdrawal is likely seen as not completely unexpected by the market given current market conditions, Jefferies analysts Thomas Chong and Zoey Zong said in a note. Based on the cash consideration offered to Cainiao's minority shareholders, the implied valuation of the business is approximately $10.3 billion, according to the note. The brokerage maintained its buy rating on Alibaba ( BABA ) stock.

In March last year, Alibaba ( BABA ) set out a new organizational structure, empowering its six divisions to raise capital and seek initial public offerings.

However, the group said in November it would no longer pursue a full spinoff of its cloud division following the expansion of US restrictions on advanced computing chip exports.

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