Alibaba has also formed a retail alliance with Auchan Retail S.A. and Ruentex Group to explore retail opportunities in China's food retail sector, the companies said in a joint statement issued late Sunday.
Chinese e-commerce giant Alibaba (BABA) has expanded its presence in traditional bricks-and-mortar retailing with the acquisition of a 36.16% stake in China hypermarket operator Sun Art Retail Group for HKD$22.4 billion ($2.88 billion), which operates 490 outlets across China.
The alliance reflects Alibaba's "New Retail" vision to leverage its internet-based approach and new technology while working closely with retailer partners to provide a seamless online and offline experience to consumers in China.
Taobao China Holding, a subsidiary of Alibaba, has agreed to buy a direct 26 per cent stake from Kofu and Concord Greater China for HK$16.1 billion, at HK$6.5 a share, while it will also buy a 19.9 per cent stake in Auchan Retail, which owns 51 per cent of Sun Art, for HK$6.3 billion, also at HK$6.5 per share, according to an exchange filing by Sun Art. "By fully integrating online and physical channels together with our partners, we look forward to delivering an original and delightful shopping experience to Chinese consumers".
In August, Amazon bought United States upmarket grocery chain Whole Foods Market for US$13.7 billion, the biggest acquisition in the e-commerce giant's history, in an aggressive push further into physical stores and merge online and offline retail.
On Monday morning, Sun Art plunged 9.2 per cent in trading to HK$7.81, following a one-week suspension.
The deal would give French retailer Groupe Auchan SA, China's Alibaba Group and Taiwanese conglomerate Ruentex 36.18 percent, 36.16 percent and 4.67 percent stakes respectively in Sun Art. Alibaba would replace Ruentex as the second-largest shareholder. The offer price represents a 24% discount to Sun Art Retail's last closing price of HK$8.60 before trading was halted on November 13., according to the statement filed to the Hong Kong Stock Exchange. Sun Art now operates 446 hypermarkets as large as 17,000 square meters in 29 provinces, autonomous regions and municipalities across China under the "RT-Mart" and "Auchan" banners.