Alibaba’s logistics arm Cainiao will enhance its overseas presence with proposed buyout of local rival Best

Alibaba and its logistic arm Cainiao are part of a consortium that has made a “preliminary non-binding proposal” to buy out Best, offering to purchase all outstanding shares in the company for US$0.144 per ordinary share, or US$2.88 per American Depositary Share. Alibaba and Cainiao are existing investors in Best.

The offer for the New York-listed company, made public by Best on Monday, would be worth about 415 million yuan (US$57 million), based on 397.6 million ordinary shares outstanding disclosed in August. However, Best said that there is no guarantee of a definitive offer or a finalised transaction at this stage.

Founded in 2007, Best is a big player in the logistics sector in China and Southeast Asia. After selling its express delivery business in China to rival J&T Global Express for around 6.8 billion yuan in 2021, Best has since relied on freight, supply chain management and its global logistics services as its three main revenue streams.

“The international business of Best has plenty of possibilities,” said Zhang Yi, chief executive of iiMedia Research. “With logistics players facing cutthroat competition in China, many domestic players are eyeing opportunities in new retail and e-commerce trends to meet global demand.”