Alibaba ends a ‘cautious’ year overshadowed by antitrust probe by doubling stake in tour agency

Alibaba Group Holding has invested 240 million yuan (US$37.8 million) to double its stake in a loss-making local tour agency, a deal that caps a year of “cautious” investments since the e-commerce giant became the target of an antitrust probe on Christmas Eve 2020.

Alibaba (China) Technology Co, a subsidiary of the Chinese e-commerce giant, will double its stake in Shenzhen-listed UTour Group Co from 5.02 to 11.06 per cent by buying shares from chairman Feng Bin and deputy chairman Guo Hongbin, UTour said on Thursday.

At 4.41 yuan each, the price is half the 8.46 yuan per share that Alibaba, owner of the South China Morning Post, paid for its initial 5 per cent stake in the company in September 2020. After the deal is completed, Alibaba will be the second largest shareholder after Feng.

The investment comes at a time when Alibaba is repositioning itself for future growth after a year of regulatory challenges.

In 2018, Alibaba and its affiliates – including fintech arm Ant Group and logistics unit Cainiao Network – invested a total of 198 billion yuan in 117 deals, representing a peak year for the Hangzhou-based company’s external investments, according to a report from Chinese business registration tracking platform Qichacha.

Since then, the size and number of deals have been shrinking. In the first seven months of 2021, Alibaba – excluding its affiliates – invested 20.8 billion yuan in 22 deals. That compares with social media and gaming giant Tencent Holdings, which completed 163 deals worth a combined 93.1 billion yuan in the first half of this year, Qichacha data showed.