Alibaba buys majority stake in Rocket Internet's Lazada for $1b

According to a release, the transaction consists of a purchase of newly issued shares for about $500 million, along with the acquisition of shares from other Lazada shareholders, including Rocket. In a separate release, the internet business accelerator said it would divest a 9.1% stake to Alibaba for $137 million.

UK-based supermarket chain Tesco, which owns a 19.6% stake in Lazada, will also part exit in the transaction. Its holding, after its exit and the issue of new shares, has been reduced to 8.3%. In addition, Sweden's AB Kinnevik will sell a 3.8% stake for $57 million.

Under the deal, Alibaba will have the right to purchase, and the selling shareholders will have the right to sell, their remaining stakes at a fair market value in the 12-18 month period after the close of the transaction.

The deal is expected to further Alibaba's global expansion strategy; the company is especially interested in Southeast Asia, which has an estimated internet user base of 200 million. Currently only 3% of the region's retail sales are conducted online, and Alibaba hopes to see big returns as the sector grows.

Lazada, set up in 2012, operates in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, and has a sourcing center in Hong Kong. The company shares resources with Zalora, another Rocket-founded e-commerce platform focused on apparel, shoes, accessories and beauty products.

Since its founding Lazada has raised more than $700 million across multiple rounds of funding, including a Temasek-led round in 2014 for EUR200 million ($249 million) and a $250 million commitment in 2013 from Tesco, Access Industries, Kinnevik and Verlinvest.

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• Topics
• Southeast Asia
• Greater China
• Technology
• Consumer
• Buyouts
• Trade sale
• Singapore
• China
• TMT
• Alibaba Group
• Rocket Internet