Chinese eCommerce giant Alibaba is set to spend around $3.6bn to acquire a controlling stake in Sun Art, one of China’s leading hypermarket and supermarket chains. The deal will give Alibaba approximately 72 per cent of the business.

The transaction will see Alibaba claim 70.94 per cent of equity interest in A-RT Holdings from France-based Auchan Retail. Currently, A-RT owns around 51 per cent of the equity interest in Sun Art.

Alibaba first invested in Sun Art in 2017. The company paid approximately $2.88bn to Ruentex for an ‘aggregate direct and indirect’ stake in the Group. This gave Alibaba 36.16 per cent of Sun Art.

The initial investment was part of an alliance between Alibaba, Auchan, and Ruentex to introduce omnichannel integration and a more personalised experience at Sun Art stores. Now, all of Sun Art’s 481 hypermarkets and three mid-size supermarkets have been integrated with Alibaba’s Taoxianda and Tmall Supermarket platforms, offering one-hour and half-day on-demand delivery.

“Alibaba’s strategic investment in Sun Art in 2017 was an important step in our New Retail strategy. The alliance we formed with Auchan Retail and Ruentex was instrumental in building a robust infrastructure to create opportunities and value in China’s retail sector,” said Daniel Zhang, Chairman and Chief Executive Officer at Alibaba.

“Led by Chief Executive Officer Peter Huang, Sun Art has achieved impressive results in its digitalisation, and pursued promising synergies with businesses across the Alibaba digital economy. As the COVID-19 pandemic is accelerating the digitalisation of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our New Retail vision and serve more consumers with a fully integrated experience.”