Alibaba pays $459 million for stake in Chinese hotel tech company
Alibaba Group Holding Ltd, in its first big investment since raising $25 billion in a initial public offering, has bought 15 percent of Chinese hospitality technology provider Beijing Shiji Information Technology Co Ltd for 2.81 billion yuan
BEIJING (Reuters) - Alibaba Group Holding Ltd, in its first big investment since raising $25 billion in a record-breaking New York initial public offering, has bought 15 percent of Chinese hospitality technology provider Beijing Shiji Information Technology Co Ltd for 2.81 billion yuan ($458.66 million).
The investment is expected to allow the e-commerce giant to develop its Taobao travel business alongside Beijing Shiji, including back-office services, while helping to migrate hotel customers to Alibaba's e-commerce website.
Beijing Shiji provides IT consulting to hotels in China's fast-growing market. It sells everything from software that manages room reservations, purchasing, inventory, and point of sales systems, to broadband networks and billing systems.
The Shenzhen Stock Exchange-listed firm says almost 6,000 hotels in China use its products, including 90 percent of the country's five-star hotels, according to Sunday's filing. Its customers include Grant Hyatt Hotels, Marriott International Inc, Westin Hotels and Resorts and Sofitel Luxury Hotels.
Alibaba's Taobao (China) Software unit agreed to purchase 54.55 million shares of the company for 51.52 yuan per share, Beijing Shiji disclosed in a regulatory filing on Sunday. The deal should close early next month. An Alibaba spokesman declined to comment.
Alibaba initially partnered with Beijing Shiji in an agreement announced on March 28. Beijing Shiji's shares have gained more than 46 percent since then.
Copyright Thomson Reuters, 2014.
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