The Chinese e-commerce giant Alibaba Group Holding Limited is divesting itself of its majority stake in the supermarket operator Sun Art. With the move, the group is advancing its strategy, which envisages a greater concentration on online retail. Two weeks ago, the Alibaba Group announced the sale of the Intime department store chain.
On Tuesday, the group announced that it would sell the shares in Sun Art Retail Group Limited held by its subsidiaries A-RT Retail and Taobao China to Paragon Shine Limited, which is owned by a fund of the Chinese financial investor DCP Capital.
The two Alibaba subsidiaries currently hold a total of almost 73.7 percent of Sun Art shares. The transaction also includes shares in the company New Retail, which is controlled by Alibaba’s investment arm but is not a subsidiary of the company. New Retail currently owns around 5.0 percent of Sun Art shares.
The group wants to concentrate more on its core business
Including the latest dividends, Alibaba subsidiaries and New Retail will receive a total of around 11.6 billion Hong Kong dollars (1.4 billion euros) under the agreement. The group estimated the loss that would result for Alibaba shareholders from the deconsolidation of Sun Art at almost HK$13.2 billion.
Alibaba Group plans to use the proceeds from the transaction for the further development of the company, distributions to shareholders and general business purposes. The separation from Sun Art is a “good opportunity to monetize non-core assets and use the proceeds to strengthen focus on the core business and increase shareholder returns,” the group said.