Alibaba Nears First Big Deal Since Antitrust Fine

Alibaba Group is poised to make its first major investment since it paid a record antitrust fine as part of a bruising crackdown on Jack Ma’s internet empire.

A consortium led by the e-commerce giant and the Jiangsu provincial government is nearing a deal to buy a stake in the retail arm of Chinese billionaire Zhang Jindong’s Suning conglomerate, people familiar with the matter have said. The deal would add to the 20% stake that Alibaba already owns in Suning.com, one of China’s biggest retailers of appliances, electronics, and other consumer goods that’s valued at roughly US$8 billion.

The potential investment could mark a comeback for Alibaba since authorities levied a US$2.8 billion fine on the company in April for anti-monopoly violations, fueling its first loss in nine years. The deal would help the e-commerce firm encroach on top rival JD.com’s traditional stronghold of electronics, while joining hands with local authorities signals the tech billionaire and his company are ready to get back to deal-making.

“Should the deal proceed, it strengthens the case that Alibaba isn’t allowing regulatory overhang to constrain its strategic ambitions or opportunistic investments,” said Michael Norris, a tech analyst with Shanghai-based market research firm AgencyChina. “The potential strategic value of Suning’s stores, distribution centers and last-mile delivery stations to an increasingly omnichannel Alibaba is clear.”

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