In This Article:
Alibaba Group Holding Ltd China's e-commerce giant Alibaba Group Holding Ltd (BABA, Financial) has announced the sale of its entire 73.7% stake in Sun Art Retail Group, China's biggest hypermarket operator, to private equity firm DCP Capital for approximately $1.6 billion.
The divestment is part of Alibaba's strategic shift to concentrate on its e-commerce core, as the intensifying competition from e-commerce rivals such as Pinduoduo sends a chill through the group's investment holdings.
Alibaba, which had bought the controlling stake in Sun Art for $3.6 billion just two years ago, is estimated to have lost about $1.8 billion from the transaction.
Alibaba's shares initially briefly fell by 2% before recovering, while Sun Art's Hong Kong-listed shares were put down by 35 per cent.
Alibaba sold off its stake in Intime Retail Group, making the move its second big divestment of brick-and-mortar assets in a month.
These strategic decisions serve to emphasize Alibaba's preference for building and focusing on its primary e-commerce business str, improving its operations, and easing its returns to shareholders.
This article first appeared on GuruFocus.