China's Haier Electronics joins with Alibaba to beef up logistics business
HONG KONG Dec 9 (Reuters) - Chinese appliance maker Haier Electronics Group Co Ltd plans to team up with e-commerce giant Alibaba Group to further develop its logistics business, with a total capital injection of HK$1.86 billion ($240 million).
Alibaba will hold a 9.9 percent stake in the joint venture with Hong Kong-listed Haier Electronics, which manufactures and sells washing machines and water heaters.
As part of the deal, Alibaba will also subscribe for about 2 percent of Haier Electronics' enlarged share capital at HK$18.413 per share and HK$1.32 billion worth of convertible and exchangeable bonds, Haier said in a filing to the Hong Kong bourse early on Monday.
The strategic investment is aimed at leveraging on Haier's distribution capacity in third and fourth tier cities and Alibaba's e-commerce platform Tmall.com to distribute large-sized goods such as home appliances and furniture.
Alibaba Group's plans to revolutionise China's retail industry, investing $16 billion in logistics and support by 2020, will open up China's vast interior and bring access to hundreds of millions of potential new customers.
Trading in Haier's shares, which was suspended on Dec. 6, will resume on Monday. The stock is up 64 percent this year, outpacing a 4.8 percent rise in the benchmark Hang Seng Index .