SHANGHAI: Chinese Internet giant Alibaba is to pay 28.3 billion yuan ($4.6 billion) for a nearly 20 percent stake in consumer electronics retailer Suning, the two companies said in a statement on Monday.
At the same time, the Chinese shopping chain will invest up to 14 billion yuan for just over one percent of Alibaba, the statement said, bringing the total value of the deal to nearly $7.0 billion.
It will make Alibaba the second-largest shareholder in Suning, the statement said, adding the two firms would embark on a “strategic collaboration” that “signals the further integration of digital and offline retail.”
Suning is one of China’s biggest consumer electronics retailers, while Alibaba’s Tmall.com site is believed to command more than half the Chinese market for business-to-consumer transactions. Its Taobao platform holds more than 90 percent of the country’s consumer-to-consumer market.
Alibaba’s founder and executive chairman Jack Ma said: “Over the past two decades, e-commerce has become an inextricable part of the lives of Chinese consumers, and this new alliance brings forth a new commerce model that fully integrates online and offline.”
Suning chairman Zhang Jindong said the deal would “help transform China’s manufacturing industry and broaden the global horizons of Chinese brands.”
It is the latest in a string of acquisitions by Alibaba as Ma seeks to diversify the huge New
York-listed company, which is facing domestic competition from Internet giants Baidu and Tencent and remains relatively unknown outside China.
Two weeks ago Alibaba announced it would invest $1.0 billion in its cloud computing arm to expand its international presence.