Chinese technology giant Alibaba announced that it will take control of the leading hypermarket chain Sun Art Retail, while its offshoot Ant Group has received the green light for its stock exchange listing in Hong Kong.
Asia’s largest company will pay HK$28 billion ($3.6 billion) to double its stake in brick and mortar retailer Sun Art from 36.16 percent to 72 percent by acquiring equity from Auchan Retail International.
Alibaba, China’s largest e-commerce company, has fended off competition from rivals such as JD.com as it seeks to expand its offline shopping services and gain further ground in the Chinese retail market.
The company already owns Taobao, the world’s largest online marketplace.
Alibaba initially entered into an alliance with Hong Kong listed Sun Art in 2017 and invested HK$22.4 billion in the supermarket chain to integrate its online food ordering platform and provide home delivery services.
Sun Art, which operates 481 hypermarkets and three medium-sized supermarkets in China, is currently controlled by a unit of the Mulliez family, one of the richest families in France.
Daniel Zhang, Chairman and CEO of Alibaba, said in a statement: “As the COVID 19 pandemic accelerates the digitization of consumer lifestyles and business activities, this commitment to Sun Art serves to reinforce our vision of the ‘new retail’ and serve more consumers with a fully integrated experience.
Alibaba added that Peter Huang will be appointed Chairman of Sun Art in addition to his current role as Chief Executive Officer.
Sun Art’s shares rose 19 percent on Monday on the back of the news, while Alibaba in Hong Kong climbed 1 percent.
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Alibaba subsidiary Ant Group, an offshoot of Alibaba financial technology, has received approval from the Chinese Securities Regulatory Commission for the Hong Kong portion of its IPO.
Ant Group, formerly known as Ant Financial, plans to be listed simultaneously on the Hong Stock Exchange and the STAR market of the Shanghai Stock Exchange. The IPO could potentially be one of the largest ever.
The company, which is 33 percent owned by Alibaba and controlled by billionaire Jack Ma, made a profit of 21.9 billion Chinese yuan ($3.28 billion) in the first half of the year on total revenues of 72.5 billion yuan. This was an annual profit increase of more than 1,000 percent as revenues also rose by 38 percent.