Simpson Thacher and Sullivan lead on Alibaba's $6.8bn electronics alliance

Simpson Thacher & Bartlett and Sullivan & Cromwell have secured mandates on Alibaba’s $6.8bn (£4.4bn) alliance with electronics retailer Suning Commerce.

The Chinese e-commerce giant turned to Simpson Thacher for the deal with a team led by Hong Kong M&A head Katie Sudol and China practice head Leiming Chen.

The agreement sees Alibaba invest $4.63bn (£2.97bn) in Suning giving it a 19.9% stake in the company, and becoming the second largest shareholder. Concurrently Suning has invested $2.2bn (£1.4bn) in Alibaba giving it 1.1% interest in the company.

Under the agreement, Suning will open a flagship store on Alibaba’s Tmall.com platform, selling electronics, home appliances and baby products.

Sullivan acted for Nanjing-headquartered Suning which operates 1,600 outlets across 600 Chinese cities. The firm fielded a cross-border team led by Hong Kong partner Kay Ian Ng and New York-based partner Jay Clayton.

Alibaba Group chairman Jack Ma, said: “Over the past two decades, e-commerce has become an inextricable part of the lives of Chinese consumers, and this new alliance brings forth a new commerce model that fully integrates online and offline.”

The deal is subject to regulatory approval and the approval of Suning shareholders.

Simpson Thacher took the lead on Alibaba’s $21bn (£13bn) IPO when the Hangzhou-based company listed on the New York stock exchange last year.

Firms advising on the listing took home a combined total of $15.8m (£9.8m) in legal fees, according to a company filing with the SEC. Sullivan & Cromwell acted for the banks on the deal while Chinese outfit Fangda Partners, advised Alibaba on Chinese law, and King & Wood Mallesons, provided PRC counsel to the underwriters.