Hong Kong, China (4E) – Alibaba Group will make a $2.82bn Hong Kong dollar ($360mn) investment in Haier Electronics Group Co. as part of a deal between the two firms to create a logistics joint venture.
Alibaba, which is poised toward making the biggest initial public offering since Facebook Inc., is working to improve its delivery services and reach the level of scale and efficiency that FedEx Corp. and United Parcel Service Inc. have in the U.S.
The Alibaba and Haier agreement is focused at forming a logistics and service network across China that will deliver and assemble household appliances and other large goods, according to both companies.
Alibaba believes it could further benefit from rising consumption in China by working with Haier Electronics, which manufactures washing machines and has interests in home-appliance logistics.
Under the deal, Alibaba will invest $1.86bn Hong Kong dollars in Goodaymart, a Haier subsidiary, to kick off the joint venture, and will spend $541mn Hong Kong dollars for a 9.9 percent stake in Goodaymart, which specializes in the delivery of large-size items.
Alibaba Group, which is China’s largest operator of e-commerce sites, will also invest 965mn Hong Kong dollars for a 2 percent stake in Haier Electronics, a subsidiary of Qingdao Haier Co.