Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Alibaba takes control of merchant solar art for $ 3.6 billion

Alibaba takes control of merchant solar art for $ 3.6 billion

Alibaba Group Holding Ltd. invests around 3.6 billion. Dollars to double its stake in Sun Art Retail Group Ltd., which takes control of one of China’s largest hypermarts to try to ward off rivals such as JD.com Inc. in the hottest growth arena of e-commerce.

Alibaba raises its direct and indirect shareholding in the grocery chain to around 72% by acquiring capital from Auchan Retail International SA, then makes a general offer to shareholders to buy the rest Sun Art. The latter Hong Kong-listed stock jumped as much as 30% on Monday, the largest intraday gain since 2011.

The deal signals that Asia’s most valuable company will seek to dominate one of Chinese e-commerce’s largest untapped borders. Alibaba CEO Daniel Zhang has made the expansion into the physical retail and grocery business a cornerstone of his growth strategy in particular, an effort that paid off during the coronavirus pandemic. Sun Art already operates hundreds of hypermarkets across China under the Auchan and RT-Mart brands, a massive distribution and warehousing network that can complement Alibaba’s own efforts in fresh produce.

The Chinese e-commerce giant is now struggling with intensifying competition from people like JD, the food supply giant Meituan and startups such as Tencent Holdings Ltd.-backed Missfresh, all pursuing a grocery and fresh produce market that HSBC expects to grow 2.5 times to 690 billion yuan ($ 103 billion) by 2022 from 2019. Alibaba was among the pioneers in that arena and announced in 2017 it would use about $ 2.9 billion. for 36% of Sun Art.

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