Alibaba has announced its offering of privatization to the leading Chinese department store operator Intime Retail to deepen its integration to various stores.

The deal involves Alibaba subsidiary to partner with an entity that is wholly owned by Intime Retail founder Shen Guo Jun. Both of them will buy out Intime shareholders and make the Hong Kong stock exchange listed the company as private.

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The proposal stated that the buyers will pay HK$10 (US$1.29) per share for Intime stock, which represents 42 percent premium from the last closing price on Dec. 28. Alibaba has 28 percent ownership of Intime in pursuant to an initial investment in July 2014. 

The Chinese e-commerce company’s proposal is subject to customary closing conditions, including approval from shareholders and board members of Intime. If it turns out positive, Alibaba would become the controlling shareholder of Intime with 74 percent share.

“Alibaba will be able to do more experiments with Intime in the retail sector. Intime’s valuation is relatively low now so it would be a good time to buy,” Ray Zhao, a Shenzhen-based analyst at Guotai Junan Securities Co, said.

Alibaba and Intime have been forming their business relationship over the years. Their relationship has been giving Alibaba an access to Intime’s inventory, allowing its online clients to get orders from physical stores. Alibaba’s proposal of privatization will give Intime a chance to work closely on the integration of online and offline shopping with a separate group of shareholders.

This latest move from the Chinese online retail company reflected its plan of integrating its enormous e-commerce assets and ecosystem to various retailers. This is also part of the company’s vision to merge online and offline shopping with the advent if mobile-internet technologies.

Intime has been the leading department store chain in China. It has 29 department stores and 17 shopping malls, which are located in the first- and second-tier cities in China including Alibaba Group’s headquarters Zhejiang Province. 

TagsAlibaba, Intime, Private Intime, China leading department store, Chinese retailer Intime