• Investment Banking

Capital Creates More Commerce

How Morgan Stanley helped Alibaba raise capital to expand an eCommerce revolution in China and beyond.

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In thousands of rural towns across China, local entrepreneurs are making the parts that power the global economy: gears for the cranes raising megacities in the desert; specialized batteries powering the latest must-have device; tiny motors at the heart of a medical innovation grown from a late-night coffee-shop sketch.

Elsewhere, engineers and architects scour for cost-effective building blocks to turn blueprints into skyscrapers. Programmers and designers search for off-the-shelf parts essential to the next game-changing gadget. Lab researchers try to source a solution for a new treatment.

Alibaba helps connect ideas with solutions and buyers with sellers. Like its namesake, the famous character of the Arabian fable who shouts “Open sesame!” Alibaba opens doors. The result is global commerce on one of the largest marketplaces and distribution channels in the world.

When the company was ready to open its own doors to investors, it tapped Morgan Stanley. Acting as a global coordinator and a joint book runner for Alibaba’s $25 billion initial public offering—the largest IPO in history—Morgan Stanley connected one of China’s most dynamic companies with global investors.

Two months after that September 2014 IPO, Alibaba again tapped Morgan Stanley—this time to lead an $8 billion debt offering, the largest ever dollar-debt transaction by an Asian company. The deal ultimately allowed Alibaba to refinance existing bank debt with longer-dated, lower cost and more flexible debt capital.

In 1999, a group of 18 founders conceived of Alibaba in a tiny apartment in Hangzhou. Fifteen short years later, in 2014, the digital marketplace posted more than 14 billion orders.1 In the final quarter of 2015, Alibaba grew its gross merchandise volume, a key barometer for online retailers, by 23% year-on-year to 964 billion yuan ($149 billion). From a largely business-to-business marketplace portal initially, it has expanded to encompass many other forms of online commerce: business-to-consumer, consumer-to-consumer, cloud-computing and mobile apps.

Alibaba’s rise continues to help generate economic opportunity for millions of people in rural China, where eCommerce and mobile technology are rewriting the ancient rules of the marketplace. With Morgan Stanley’s help, it also continues to add new chapters to the story of how global capital is reinventing commerce.

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