Tue, Nov 21, 2017 - Page 12 News List

Alibaba agrees to buy US$2.88bn stake in Sun Art

JOINT VENTURE:Ruentex and France-based Auchan are to be joined by Chinese giant Alibaba in a move to blend online and offline sales in China’s retail sector

By Kuo Chia-erh  /  Staff reporter

Two listed units of the Ruentex Group (潤泰集團) yesterday confirmed that Chinese e-commerce giant Alibaba Group Holding Ltd (阿里巴巴) would acquire a 36.16 percent stake in their joint venture that operates a hypermarket chain in China.

Together with France-based Auchan SA, the Taiwanese conglomerate runs its retail business in China through Sun Art Retail Group Ltd (高鑫零售), which has 446 hypermarkets in the Chinese market under the RT-Mart (大潤發) and Auchan (歐尚) banners, a joint company statement said.

Alibaba has agreed to buy a stake in Sun Art for US$2.88 billion from two major units of the group, garment maker Ruentex Industries Ltd (潤泰全球) and property developer Ruentex Development Co (潤泰創新), Ruentex officials told a news conference in Taipei yesterday.

Ruentex Industries and Ruentex Development are expected to book NT$16.8 billion (US$558 million) and NT$11.2 billion in profit respectively through the deal, the Ruentex Group said.

The transaction, which is scheduled to be completed by the end of this year, would make Alibaba the second-largest shareholder of Sun Art, replacing Ruentex.

Ruentex would still have a 4.67 percent share in Sun Art after the acquisition, while Auchan SA would hold the remaining 36.18 percent, the statement said.

Shares in Ruentex Industries rose 1.89 percent to close at NT$53.8 in Taipei trading yesterday after the announcement, while Ruentex Development’s shares climbed 4.09 percent to NT$33.05, market data showed.

However, Hong Kong-listed Sun Art saw its stock fall by 4.07 percent to HK$8.25.

The deal is seen as part of Alibaba’s efforts to form a retail alliance with Auchan SA and Ruentex to explore business opportunities in China’s retail sector by blending online and offline shopping services for that nation’s 1.3 billion people.

“Ruentex is delighted to see the win-win collaboration between Sun Art and Alibaba with high synergies in online and offline that will meet the needs of consumers for a better life with better products and services and higher efficiency,” Ruentex Group vice chairman Peter Huang (黃明端) said in a statement.

“Physical stores serve an indispensable role during the consumer journey, and should be enhanced through data-driven technology and personalized services in the digital economy,” Alibaba chief executive officer Daniel Zhang (張勇) said.

This was not the first time that Alibaba formed a partnership with leading retailers that run brick-and-mortar stores in China to expand its presence in the retail industry there.

In February, the e-commerce giant announced that it has teamed up with Shanghai Bailian Group Co (百聯集團), one of China’s largest supermarket and department store chains, in a bid to transform the outdated retail industry.

This story has been viewed 2438 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top