E-commerce behemoth Alibaba is expanding its delivery power – again.
The company announced Monday that it would be buying a stake of leading Chinese logistics company STO Express.
The plan will allow Deyin Investment, which is STO’s controlling stakeholder with a 53.76% stake, to remain in control of the logistics company, while allowing Alibaba to participate in the business’s decision-making.
Here’s how it will work, according to an STO statement: Deyin Investment will set up two new companies, dubbed “A” and “B,” to sell or transfer 29.90% and 16.10% of STO Express stakes to respectively.
Alibaba, as a “strategic investor,” has agreed to pay 4.66 billion yuan ($692.87 million) for a 49% stake in A, leaving Deyin Investment as A’s controlling stake holder. Deyin will hold all of B, and it will directly hold a 7.76% stake in STO.
Established in 1993, STO Express is one of China’s five most influential private logistics companies – and the fourth of those five to be invested in by Alibaba. Once Alibaba’s investments in STO take place, the Shenzhen-listed Yunda Express will be the only one among the five without the tech giant’s investment.