By Ben Otto
Alibaba Group Holding Ltd. will invest about US$3.6 billion to acquire a controlling stake in hypermarket operator Sun Art Retail Group Ltd., part of the technology giant's efforts to bridge e-commerce operations with physical stores.
Alibaba will make the investment through subsidiary Taobao China Holding Ltd., raising its direct and indirect stake in China-based Sun Art to about 72%, the company said Monday.
Taobao China will also make a mandatory offer for all shares of Sun Art at a price of 8.10 Hong Kong dollars (US$1.05) per share, potentially paying up to an additional US$2.2 billion to acquire all remaining shares, Alibaba said.
The price, at a 2.1% premium to the stock's last-traded price, gives Sun Art a valuation of about HK$77.27 billion, Alibaba added.
"As the Covid-19 pandemic is accelerating the digitalization of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our New Retail vision and serve more consumers with a fully integrated experience," Daniel Zhang, Alibaba's chairman and chief executive, said in a statement.
At the end of June, Sun Art operated 481 hypermarkets and three midsize supermarkets in China, Alibaba said.
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(END) Dow Jones Newswires
October 18, 2020 21:06 ET (01:06 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.