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Singapore Inc. Buys $1 Billion in Alibaba, Adding to China Bets

  • Temasek, GIC spent $500 million each to boost Alibaba holdings
  • The investors are boosting stakes in Chinese tech firms

Singapore’s state-owned investment firms Temasek Holdings Pte and GIC Pte, long-term Alibaba Group Holding Inc. investors, bought a combined $1 billion of stock in the Chinese e-commerce behemoth, the second-biggest stakes being sold by SoftBank Group Corp.

The purchases add to the technology holdings of both investment firms. Temasek and GIC were early investors in Alibaba and hold major stakes in technology firms benefiting from the economic growth of the world’s second-biggest economy. Japan’s SoftBank is selling shares of China’s biggest online retailer for the first time in 16 years.

“The purchase shows that GIC and Temasek are still confident about China’s economy and the rise of e-commerce and technology in the country,” Margaret Yang, a market analyst at CMC Markets in Singapore, said. “It’s going to boost the national interest of Singapore in e-commerce in China and also in Southeast Asia.”

The state-related investment firms will each pay $500 million and $74 per Alibaba share, according to a statement from Alibaba. That would result in 6.76 million new stock each. Temasek already owns 48.6 million American depositary receipts of Alibaba, according to data compiled by Bloomberg. GIC has been a long-time investor since before the Chinese firm’s initial public offering in 2014, according to a person familiar with the transaction, who asked not to be identified for confidentiality reasons.

GIC owns 60 million shares worth $482 million in Hong-Kong listed AAC Technologies Holdings Inc., a Chinese producer of miniaturized speakers and receivers for mobile phones, according to data compiled by Bloomberg. It also owns a stake in Cheetah Mobile Inc. and ChinaCache International Holdings Ltd.

Temasek owns a stake worth $98 million in Tencent Holdings Ltd., the Chinese WeChat messaging app developer. Both GIC and Temasek own stakes in Internet service provider 21Vianet Group Inc., with the Temasek stake valued at $157 million and GIC’s at $21 million.

SoftBank, the largest investor in Alibaba, is selling $8.9 billion of its stake in the Chinese e-commerce giant.

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