Alibaba’s biggest overhaul in over two decades might prove contagious, writes mak_robyn
The restructuring will give each of Alibaba’s six businesses, which include its core commerce division, as well as cloud computing, games and logistics units, their own chief executive and board of directors. More importantly, each division will have the option to “pursue independent fundraising and IPOs”, according to boss Daniel Zhang, who will continue to sit atop the Alibaba Group holding company.
and Tencent. A breakup could quickly unlock value: analysts at Citi reckon Alibaba’s two most valuable businesses – domestic e-commerce and cloud computing – are worth $222 billion combined, implying investors are ascribing little value to the rest. Loss-making divisions like online videos could be sold to a rival, while more promising bets like the logistics arm could be listed or raise money from private backers.
Tencent should take note. The $460 billion video-game giant also operates in sensitive areas like online media, cloud computing and mobile payments. If Alibaba’s approach ends up pleasing both shareholders and regulators, then it will prove hard to resist.Alibaba on March 28 said it plans to split its business into six independently run entities, enabling most of them to pursue fundraisings or listings.
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