Alibaba is in talks with YTO Express Group's founders to raise its stake in the Chinese courier company with an aim to become the top shareholder, two people told Reuters, as it accelerates consolidation in the world's largest express delivery market.
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HONG KONG: Alibaba is in talks with YTO Express Group's founders to raise its stake in the Chinese courier company with an aim to become the top shareholder, two people told Reuters, as it accelerates consolidation in the world's largest express delivery market.
Alibaba Group Holding Ltd, which already owns about 10per cent of YTO, is in talks with YTO's founding couple Yu Huijiao and Zhang Xiaojuan for an additional stake of up to 30per cent, said the people, who have knowledge of the discussions but declined to be named as the information is not yet public.
Based on YTO Express Group's market value of 47.4 billion yuan (US$7 billion) on Wednesday, a 30per cent stake would be worth US$2.1 billion, Reuters calculations show.
It was not immediately clear if Alibaba would increase its stake at once or gradually, one of the sources said.
The founders own about 53per cent of YTO mainly via their wholly owned firm Shanghai YTO Jiaolong Investment Development. YTO is China's third-largest express delivery firm by parcel volume, with a 14per cent share of the market in 2019.
An Alibaba representative dismissed the news of its plans to become YTO's top shareholder and buy up to 30per cent as "incorrect and categorically false", without providing any further details. YTO did not immediately respond to requests for comment.
A larger YTO stake would mark the latest push by the Chinese e-commerce giant to gain a bigger say in the country's fragmented but fast-growing express delivery industry.
Delivery firms in China dispatched 63 billion parcels last year, up 24per cent from 2018, while revenue for the sector grew 23per cent to 745 billion yuan, data from the State Post Bureau showed.
Alibaba, which acts as a massive marketplace for buyers and sellers, does not run a big dispatch fleet of its own in China, but has picked up stakes in top express delivery players to ensure a reliable service and to stay ahead of competitors like JD.com that have their own network.
The offer price and other details of Alibaba's plans to boost its YTO stake are yet to be finalised, the two people said, adding the founders of the courier look to sell Read More – Source