Alibaba Group Holding Limited will invest USD3.6 billion to acquire a controlling stake in Sun Art Retail Group Limited, a hypermarket and supermarket operator in China.
This transaction will raise Alibaba’s aggregate direct and indirect stake to approximately 72%, said in the statement.
As part of the transaction, Alibaba will acquire 70.94% of equity interest in A-RT Retail Holdings Limited (A-RT) from Auchan Retail International S.A. and its subsidiary (Auchan Retail) valued at approximately HKD28.0 billion (USD3.6 billion).
A-RT holds approximately 51% of the equity interest in Sun Art. Following the transaction, Alibaba will consolidate Sun Art in its financial statements.
Additionally, Peter Huang has been appointed Chairman of Sun Art in addition to his current role as Chief Executive Officer.
“Alibaba’s strategic investment in Sun Art in 2017 was an important step in our New Retail strategy. The alliance we formed with Auchan Retail and Ruentex was instrumental in building a robust infrastructure to create opportunities and value in China’s retail sector. Led by Chief Executive Officer Peter Huang, Sun Art has achieved impressive results in its digitalization, and pursued promising synergies with businesses across the Alibaba digital economy. 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,” said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group.
In November 2017, Alibaba Group, Auchan Retail and Ruentex Group announced a strategic alliance to digitalize and introduce new retail solutions at Sun Art stores, including omnichannel integration and a more personalized customer experience. Over the past three years, Sun Art has made significant progress in the digital transformation under a fast-changing market environment by leveraging resources and technology from the Alibaba ecosystem, to capitalize on the growth opportunities in China’s hypermarket and supermarket space.