JD.com Considers Spinoff of Cloud and AI Business

JD.com mulls a spinoff of its cloud and AI business segment to Jingdong Digits, a company in which it holds a minority stake.
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JD.com's  (JD) - Get Report shares were higher after it said the board authorized the tech-focused e-commerce company to explore a spinoff of its cloud and artificial-intelligence business.

The company said it was considering spinning off those businesses to Jingdong Digits Technology, a company in which JD.com owns a "significant minority stake."

An independent audit committee intends to work with third-party advisers to evaluate the terms of a potential deal, and any transaction will be subject to the audit committee's review, JD.com said.

JD.com says it can offer no assurance that a transaction will occur as a result of the process.

The Beijing company has a market cap of nearly $130 billion and is China's second largest e-commerce platform. 

Wednesday's Securities and Exchange Commission filing follows a report from earlier this month that JD.com's logistics unit has been in talks with banks for a potential initial public offering in Hong Kong. 

Multiple banks have submitted proposals to help the company's logistics arm raise capital in the public markets in what could potentially be one of the largest equity sales of 2021, the South China Morning Post reported

Meanwhile, Reuters reported that the IPO could raise US$3 billion for a public debut. 

JD Health, the company's healthcare segment, completed an IPO in early December, raising $3.5 billion in Hong Kong's second-largest deal this year. 

JD.com shares at last check were 1.6% higher at $87.50. They'd risen 5.6% in Tuesday's session.