SHANGHAI: China's e-commerce giant, Alibaba Group Holding , said on Friday it would invest an additional 23.3 billion yuan (US$3.33 billion or £2.6 billion) to raise its equity stake in its logistics affiliate Cainiao Smart Logistics Network to 63per cent from 51per cent.
Alibaba co-founded Cainiao in 2013, with partners including department store owner Intime Group, conglomerate Fosun Group and a handful of logistics companies. The network underpins delivery for Alibaba's e-commerce marketplaces.
Alibaba took control of Cainiao two years ago, bumping up its stake to 51per cent from 47per cent at the time, and said it would spend more than 100 billion yuan over five years to build out a global logistics network.
Alibaba said the latest investment would go towards subscribing for newly issued Cainiao shares and an equity interest from an existing shareholder.
It did not provide a breakdown of the acquisition cost for each deal, but its total spending suggests the logistics unit could be worth around US$28 billion.
It said other existing Cainiao shareholders also participated in the fundraising.
"Logistics is a key pillar of the Alibaba business operating System. It allows us to offer the best service to customers and to effectively advance our new retail strategy," Alibaba's CEO and chairman, Daniel Zhang, said in an e-mailed statement.
(Reporting by Brenda Goh; Additional Reporting by Josh Horwitz; Editing by Edmund Blair and Timothy Heritage)