THE WHAT? Chinese e-commerce site Alibaba has announced it is to split into six business groups.
THE DETAILS According to a regulatory filing, the groups will be made up of Cloud Intelligence Group, Taobao Tmall Business Group, Local Services Group, Global Digital Business Group, Cainiao Smart Logistics and Digital Media and Entertainment Group.
Each group will be able to individually raise outside capital and seek its own IPO, with the exception of Taobao Tmall Business Group, which will stay wholly owned by Alibaba.
The groups will have their own independent CEO and board of directors. Shares in Alibaba Group Holding gained more than 14 percent in New York following the news.
THE WHY? The biggest restructuring plan in its 24-year-history, Alibaba is thought to be looking to stay abreast of the market and raise the value of the units.
Taking to filings in the US Securities and Exchange Commission and the Hong Kong Stock Exchange, Alibaba said the units will: “capture opportunities in their respective markets and industries, thereby unlocking the value of Alibaba Group’s respective businesses.”