Alibaba Group (NYSE:BABA) has announced its agreement to sell a 78.7% stake in Chinese hypermarket chain Sun Art Retail Group to private equity firm DCP Capital for HK$12.298 billion (US$1.58 billion).
The transaction, outlined in a filing to the Hong Kong Stock Exchange, is part of the e-commerce giant's strategy to streamline its operations and focus on its core business.
"The disposal is considered to be a good opportunity for Alibaba Group (NYSE:BABA) to monetize its non-core assets and to utilize such proceeds to better focus on the development of its core businesses and enhance its shareholder return," the company said in a statement.
Alibaba acquired its stake in Sun Art for $3.6 billion in 2020 with the goal of integrating its digital footprint with the chain’s network of hypermarkets across China.
This divestment is part of broader changes in Alibaba’s retail strategy, which also involves selling its Chinese department store unit Intime. The company expects a $1.3 billion loss from the sale.
Further, last month the company announced plans to consolidate its domestic and international e-commerce platforms under a unified business unit to strengthen its position amid rising competition.
Alibaba’s US-listed shares traded down 0.3% at approximately $84.50 shortly after markets opened on Thursday, having added about 13% in 2024.