Alibaba, Suning ink biggest deal in home appliance
- By Chen Boyuan
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E-mail China.org.cn, August 10, 2015
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The new conference of Alibaba-Suning deal. [Sina Weibo] |
Alibaba and Suning today announced that Alibaba will invest 28.3 billion yuan (US$4.63 billion) for a 19.99% stake in Suning to become the second-largest shareholder of China's leading home appliance retailer.
Concurrent with Alibaba's investment in Suning, Suning will invest up to 14 billion yuan (US$2.28 billion) to subscribe for up to 27.8 million newly issued ordinary shares of Alibaba. After the investment, Suning will hold approximately a 1.1% interest in Alibaba's enlarged issued and outstanding share capital.
The strategic collaboration between Alibaba and Suning marks a milestone that signals the further integration of digital and offline retail.
Earlier rumors claimed that Baidu and Wanda would invest in Suning to form a SBW, an acronym whose Chinese pronunciation is associated with "Millionaire Suning." The rumors were nearly validated when both chairmen of Baidu and Wanda joined Zhang Jindong, the head of the Jiangsu-based Suning Commerce Group to attend the summit.
However, Tencent speculated that Alibaba was more likely to form the alliance with Suning.
Suning suspended its trading on Shanghai Stock Exchange last Monday on ground of "planning non-IPO issues," and renewed the suspension application on Aug. 10 for "protecting investors' interest amid uncertainties."
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