Chinese e-commerce titan JD.Com has publicly refuted circulating rumors that it intends to acquire the prominent supermarket chain, Yonghui Superstores. The Beijing-based company clarified that it currently has no plans to purchase Yonghui, according to a report by The Paper.
Speculation had been rife on social media platforms, suggesting that JD.Com was in discussions with Yonghui regarding a potential acquisition, with at least one round of preliminary negotiations allegedly conducted. The rumors were fueled by JD.Com's close relationship with Yonghui in recent years, which included JD.Com purchasing a 10% stake in the Fuzhou-based firm for CNY4.6 billion (USD642 million) in 2015. The two companies had announced plans to bolster cooperation in the online-to-offline business sector.
Sources familiar with the matter have suggested that JD.Com prefers wholly-owned acquisitions and is actively seeking to gain de facto control of Yonghui. They argue that a complete takeover would allow for the seamless integration of Yonghui's thousands of offline stores and fresh food supply chains into JD.Com's system.
However, according to the same rumors, Yonghui's founder and chairman, Zhang Xuansong, is more inclined to accept a financial investment from JD.Com rather than relinquishing control of his enterprise of over two decades.
Despite the rumors, shares of Yonghui [SHA: 601933] closed 3.7% higher at CNY3.63 (51 US cents) in Shanghai. Yonghui's Q1 earnings report revealed that JD.Com and its subsidiary, Suqian Hanbang Investment Management, currently hold the largest stake in the firm at 13.4%, surpassing Zhang's 8.7% and Vice Chairman Zhang Xuanning's 8.2%.
JD.Com Chief Executive Xu Ran also serves as a non-independent director of Yonghui. Despite a total net loss for Yonghui of over CNY6.7 billion in the previous two years, the company reported a net profit of CNY704 million (USD98 million) in Q1 2023, marking a 40% increase from the previous year.
