Alibaba spends $4.6b as CEO's biggest deal ever

Alibaba Group Holding Ltd. will spend 28.3 billion yuan ($4.6 billion) for a stake in Suning Commerce Group Ltd. as China's biggest e-commerce operator adds a network of electronics stores in its biggest deal ever.

Alibaba will buy a 19.99 percent stake in Suning, which in turn will spend as much as 14 billion yuan for shares in the e- commerce company, according to a Business Wire statement on Monday. The companies will partner in logistics and online sales to target deliveries as fast as two hours.

Alibaba Chairman Jack Ma is beefing up his retail presence after a 24 percent drop in the company's market value this year, bolstering the appeal of e-commerce operations facing slowing growth in China. Adding Suning to a partnership with department store operator Intime Retail Group Co. helps Alibaba compete with JD.com Inc., which specializes in selling electronics and has surged in New York trading this year.

"Suning has one of the largest physical networks for selling appliances and that would help Alibaba's locationbased services," said John Choi, an analyst at Daiwa Securities Group Inc. in Hong Kong. "Alibaba is becoming much more involved in offline retail through investments."

Suning has more than 1,600 outlets spread across 289 cities in China selling appliances, books and baby products. Alibaba will become the second- largest investor in the Nanjing-based retailer, trailing only Chairman Zhang Jindong.

Alibaba is paying 15.23 yuan a share for the stake, which is 10 percent more than Suning's closing price on Friday. "This new alliance brings forth a new commerce model that fully integrates online and offline," Ma said in the statement. The acquisition is Alibaba's biggest-ever, excluding a $7.1 billion share buyback in 2012 from Yahoo! Inc.

Alibaba has quickened the pace of its deals this year as its share price has plummeted in New York trading. So far this year, Alibaba has announced 22 deals at a total value of $9.1 billion, compared with 25 deals all of last year at a value of $5.9 billion.