ALIBABA Group Holding Limited has bought an aggregate direct and indirect stake of 36.16% in Sun Art Retail Group by acquiring shares from Ruentex for HK$22.4 billion (approximately US$2.9 billion).
The acquisition is part of a strategic partnership with Ruentex Group and French multinational Auchan Retail S.A. to explore retail opportunities in China’s food and retail sector.
Auchan Retail is increasing its stake in Sun Art Retail to 36.18%. Ruentex retains a 4.67% stake. Auchan Retail will continue to consolidate Sun Art Retail in its financials following the transaction. Citibank acted as advisor to Ruentex for the deal.
Sun Art Retail is a multi-format offline food retailer in China operating under the RT-Mart (大润发) and Auchan (欧尚) banners. It also operates superstores and unmanned stores under the Auchan Minute brand.
Combining the resources of the three companies, the new alliance will enable Sun Art Retail’s activities to benefit from Alibaba’s digital ecosystem, according to Alibaba. It will digitize and introduce new retail solutions at Sun Art Retail stores, including online and offline integration.
“E-commerce is rapidly evolving into ‘New Retail.’ The boundary between offline and online commerce disappears as we focus on fulfilling the personalized needs of each customer. In China, our New Retail initiatives are taking shape as the starting point to our ‘Five New’ strategy, comprising New Retail, New Finance, New Manufacturing, New Technology and New Energy,” says Jack Ma, founder and chairman of Alibaba, in a public letter to shareholders.
Alibaba's competitor JD.com also announced a partnership with food retail chain Walmart in April. Walmart’s subsidiary, the UK supermarket Asda, opened an online store on JD.com soon after.
As of June 30 2017, Sun Art Retail operates a total gross floor area of approximately 12 million square metres in China. Sun Art Retail currently operates 446 hypermarkets as large as 17,000 square meters in 29 provinces, autonomous regions and municipalities across China.
