Alibaba to raise up to $15bn in world’s biggest float

Chinese business with bigger revenues than Amazon and eBay combined opts for New York fundraising

China’s Alibaba, the largest e-commerce business in the world, announced yesterday it will float on an American stock market in what could be the biggest initial public share offering of all time.

Analysts reckon that Alibaba could seek to raise up to $15bn (£9bn) through the share sale in a move which could value it at between $150bn and $200bn. Details of the float may come as early as April.

At the top end, that would make Alibaba the world’s second most valuable internet company after Google, which is valued at $394bn. Amazon and Facebook both have stock market values of $172bn.

Alibaba was founded by Jack Ma and 17 friends in 1999, when it offered just 22 items on its website. It has grown to dominate Chinese e-commerce and Mr Ma’s wealth is estimated at $11.4bn. The firm employs more than 20,000 and is said to account for 70 per cent of all packages delivered in China.

The firm has not decided whether to float on the New York Stock Exchange or its more tech-heavy rival Nasdaq, but it has ruled out Hong Kong.

“Alibaba Group has decided to commence the process of an initial public offering in the United States,” the company said yesterday. “This will make us a more global company and enhance the company’s transparency, as well as allow the company to continue to pursue our long-term vision and ideals.”

More than $150bn-worth of merchandise changes hands on Alibaba’s different online platforms each year, more than Amazon and eBay put together.

The firm has nine major websites, which include consumers selling to consumers, businesses selling to consumers and to each other, global and domestic selling platforms, cloud computing and an electronic payment system.

China is second only to India in the number of internet users it has at 618 million.

McKinsey & Co has forecast its internet retail market will treble in size between 2011 and 2015 to $395bn.

In its latest figures, for the three months to September 2013, Alibaba’s quarter-on-quarter profits grew by 12 per cent to $792m on revenues up by 51 per cent at $1.78bn. In the same quarter Facebook’s profit was $422m.

Mr Ma, who owns a 7.4 per cent stake in the business, is understood to have favoured a US IPO over one in Hong Kong because it would enable he and his partners to maintain control of the business. Hong Kong Stock Exchange does not permit different classes of shares. But US markets have enabled people like Facebook founder Mark Zuckerberg and Google co-founders Larry Page and Sergey Brin to keep control of their businesses after going public.

Alibaba said that it could still list shares in China at a later date. It said: “We respect the viewpoints and policies of Hong Kong and will continue to pay close attention to and support the process of innovation and development of Hong Kong.”

The share sale could prove a massive $260m windfall for the investment banks chosen to advise on it, based on the usual 1.75 per cent underwiting fees they charge.

Alibaba is in discussions with Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs Group, JP Morgan, and Morgan Stanley for lead underwriting roles. Most of the banks are likely to end up with at least some role in the share offer.

Yahoo owns a 24 per cent stake in Alibaba and Japan’s Softbank has a 37 per cent stake. They could both sell shares in the offer.

From China with smiles; Alibaba founder Jack Ma

Jack Ma, 49, was born in the city of Hangzhou and started as an English teacher and tour guide. On one of his trips he showed Yahoo founder Jerry Yang the Great Wall.

Alibaba took off as a way for Chinese firms to showcase their goods to the West, and Yahoo bought a $1bn stake.

Mr Ma stepped down as CEO last year but remains chairman. He has shifted his focus to improving health and education in China.

“If we don’t do this then young Chinese people will grow up with deep pockets but shallow minds,” he said.

Possible value of Alibaba: $200bn

Wealth of founder, Jack Ma: $11.4bn

Life and Style
A teenager boy wakes up.
Arts and Entertainment
Critics say Kipling showed loathing for India's primitive villagers in The Jungle Book
filmChristopher Walken, Bill Murray, Scarlett Johanssen Idris Elba, Andy Serkis, Benedict Cumberbatch, Cate Blanchett and Christian Bale
Life and Style
food + drink
Life and Style
Playing to win: for Tanith Carey, pictured with Lily, right, and Clio, even simple games had to have an educational purpose
lifeTanith Carey explains what made her take her foot off the gas
Life and Style
Arts and Entertainment
A still from Duncan Campbell's hour-long film 'It for Others'
Turner Prize 2014
Arts and Entertainment
Tony Hadley in a scene from ‘Soul Boys Of The Western World’
musicSpandau Ballet are back together - on stage and screen
Arts and Entertainment
From left to right: Ed Stoppard as Brian Epstein, Sheridan Smith as Cilla Black and Elliott Cowan as George Martin in 'Cilla'
tvCilla review: A poignant ending to mini-series
Life and Style
Bearing up: Sebastian Flyte with his teddy Aloysius in Brideshead Revisited
lifePhilippa Perry explains why a third of students take a bear to uni
Arts and Entertainment
Sir Alan Sugar appearing in a shot from Apprentice which was used in a Cassette Boy mashup
artsA judge will rule if pieces are funny enough to be classed as parodies
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

SQL Developer (Stored Procedures) - Hertfordshire/Middlesex

£300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...

Day In a Page

Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style