Alibaba Group, a leading e-commerce company, has decided to sell its majority stake in Sun Art Retail Group, a popular hypermarket chain in China.
The buyer is DCP Capital, a private equity firm, which will pay HK$12.298 billion (around $1.58 billion).
Alibaba acquired 78.7% of Sun Art in 2020 for $3.6 billion with plans to use their leverage to help grow Sun Art’s large store network across China.
However, Alibaba has now opted to sell its stake in Sun Art.
The decision comes after Sun Art’s share price saw an 85% increase in the past year, outpacing the 20% growth in the Hang Seng Index.
The sale is part of Alibaba’s efforts to streamline its business by focusing more on its core e-commerce activities.
In addition to selling its Sun Art stake, Alibaba is also divesting its Chinese department store chain, Intime, although it may be at a loss.
This shift reflects Alibaba's strategy to strengthen its core operations in a competitive market.
