Alibaba restructuring to enhance decision-making, CEO says

SHANGHAI/HONG KONG (Reuters) -Alibaba Group’s restructuring will allow all its business units to become more agile and enhance faster decision-making and responses to market changes, the tech conglomerate’s chief executive Daniel Zhang said on Thursday.

Alibaba (NYSE:) began laying the groundwork for the restructuring over the past few years, he told a conference call, adding in future the Jack Ma-founded company will be more in the nature of an asset and capital operator than a business operator.

Zhang’s comments come two days after Alibaba announced its largest restructuring in the company’s history, which will see it change into a holding company structure with six business units, each with their own boards and CEOs.

The restructuring also opens up the possibility for each unit to raise funds through its own initial public offering (IPO).

As a result of the restructuring, each business unit can pursue independent fundraisings and IPOs when they’re ready, Alibaba Chief Financial Officer Toby Xu said on the call, when asked about the timeline for the market listings.

Some analysts say Alibaba is currently undervalued as a standalone conglomerate and a breakup would allow investors to value each business division independently.

The restructuring could also better protect Alibaba shareholders from regulatory pressures, as penalties levied on one division in theory would not affect the operations of another, analysts says.