Chinese multinational e-commerce and retail giant Alibaba will place some of its online pharmacy business into a listed unit in a deal valued at HK$10.6 billion ($1.35 billion), with Alibaba healthcare breaking into the market.
This new deal will see Alibaba receive newly issued shares in Ali Health, taking its economic interest in the firm to 56.2% from 48.1% currently. After this deal, the company will also have a 67.5% voting interest in Ali Health.
According to Alibaba, the deal was subject to approval from Ali Health shareholders as well as the Hong Kong stock exchange. The deal can help Ali Health increase their business amid a broader push into a fast-growing healthcare technology market by other firms in China like Ping An Healthcare.
Alibaba CEO Daniel Zhang said that healthcare was a “strategically important” business area for the firm and that the deal would help turn Ali Health into the country’s “best healthcare ecosystem”. He added that the deal would help the firm expand by adding new categories to its offering. Many technology firms are aiming to break into the rapidly growing private health market. Chinese healthcare spending is set to hit $1 trillion by 2020, up from $357 billion in 2011.