Chinese e-commerce giant Alibaba Group announced on Monday that it will pay 5.3 billion Hong Kong dollars (692 million USD) to acquire shares of Hong Kong-listed department store operator Intime Retail Group Co.
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Intime's stocks were opened at 10.50 Hong Kong dollars per share on Monday, 16.28 percent higher than the previous trading price.
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Under the two companies' agreement, Alibaba will acquire 9.9 percent of Intime's shares for 1.6 billion Hong Kong dollars, while buys 3.7-billion -HK dollar worth of convertible bonds of the high-street company.
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Alibaba will exchange the bonds for Intime shares in three years so that it will eventually hold a 26-percent stake in the company.
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According to the agreement, the pair will form a joint venture to develop shopping malls, department stores and supermarkets related to online-to-offline (O2O) business in China.
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Zhang Yong, COO of Alibaba Group, said future business will involve integration and merging of the high-street economy and e-commerce, a process which will be assisted by big data and cloud computing technology.
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As of the end of last year, Intime ran 28 department stores and eight shopping malls in China.Â