China’s Alibaba to sell Sun Art stake to DCP for $1.6 billion

BEIJING: China’s Alibaba Group Holding Ltd said on Wednesday it had agreed to sell its majority stake in hypermarket chain Sun Art Retail Group to Chinese private equity firm DCP Capital for HK$12.298 billion ($1.58 billion).

The 78.7 per cent share represents holdings held by Alibaba subsidiaries, according to a filing to the Hong Kong Stock Exchange.

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Alibaba paid $3.6 billion for a controlling stake in Sun Art in 2020 in the hope of further leveraging its digital presence to support Sun Art’s hundreds of hypermarkets in China.

The disposal of the stake comes after an 85 per cent jump in Sun Art’s shares in Hong Kong in the past year, which easily beat an around 20 per cent rise in the main Hang Seng Index.

The e-commerce giant is also selling its Chinese department store unit Intime even if it books a loss from the deal.

The stake sales are part of Alibaba’s reshuffling of its business portfolio to focus on its core e-commerce operations.

Meanwhile, Alibaba is China’s largest cloud vendor, garnering 29.9 percent of the market share for the first half of 2023, followed by Huawei with 13.2 percent and China Telecom with 12.2 percent, according to data from industry research group IDC.

The latest issue comes after the company’s customers suffered a service disruption on November 12 that lasted over 3 hours and impacted a broader range of products, and affected a far more parts of the world.

Dozens of products impacted during that disruption included cloud-based database management systems and cloud communication systems, while the regions impacted ranged from East Asia, Southeast Asia, and the Middle East to North America.