Alibaba to Invest in Haier, Driving Up White-Goods Maker’s Stock
Alibaba Group Holding Ltd. agreed to buy shares in Haier Electronics Group Co. and its logistics business, as China’s biggest e-commerce company builds its distribution in the world’s most populous country. Haier Electronics (1169) surged 18 percent in Hong Kong trading.
Alibaba will gain a 9.9 percent stake in Qingdao Haier (600690) Logistics Co. and about 2 percent in white goods maker Haier Electronics, according to a stock-exchange filing. Alibaba will also subscribe to a HK$1.3 billion ($168 million) convertible bond that could lift its stake in the target to 24 percent, Haier Electronics said in its statement.
Billionaire Chairman Jack Ma’s company, which says it generates about 70 percent of package deliveries in China, is bolstering Alibaba’s transport services as he targets a distribution network that can reach virtually any place in the country within 24 hours. The company, which may be headed toward the biggest initial public offering since Facebook Inc., seeks to help create the kind of scale and efficiency enjoyed by United Parcel Service Inc. and FedEx Corp. in the U.S.
Companies such as Haier are poised to benefit in the most populous nation as rising incomes and urbanization boost demand. China’s urban population surpassed 710 million last year from about 200 million in 1980 and higher salaries from city jobs are driving consumption, according to data compiled by Bloomberg.
Haier Electronics surged 18.4 percent to HK$22.05 at 9:40 a.m. in Hong Kong trading. The stock has almost doubled in value this year.
Operating income at Qingdao Haier has increased by more than 25 percent annually since 2008, according to data compiled by Bloomberg. It is the Shanghai-listed arm of Haier Group, the country’s largest appliance maker, which last year acquired New Zealand’s Fisher & Paykel Appliances Holdings Ltd. to expand overseas and add manufacturing facilities around the world.
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