Shares in Alibaba jumped on the Hong Kong and New York boards after the Chinese tech behemoth announced it would split the company into six business entities on March 28.
According to Alibaba CEO Zhang Yong, the Alibaba Group will be divided into six smaller groups, including Ali Cloud and Tmall, and a number of business branches. All the subsidiaries will run under a separate board of directors with the Alibaba Group becoming a holding company. It is the largest restructuring in the Group’s 24-year history.
In an open letter to employees, Zhang said that splitting the firm up will better test each subsidiary with the market and it will enable them to explore new funding and public listing options. Analysts said that the separation will enable Alibaba to be more professional and track the market better, but it may also cause fierce internal competition.
Just before the announcement, media reported that Alibaba founder and former CEO Jack Ma had returned to the company’s headquarters in Hangzhou from overseas. Ma has largely kept a low profile and spent a lot of time abroad since the Chinese government in 2020 ordered Alibaba to halt a lucrative listing of financial arm Ant Group in New York due to potential financial risks in its operation.
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