King & Wood Mallesons advises Haier Electronics on Alibaba co-operation

King & Wood Mallesons has advised Haier Electronics on a strategic investment agreement with Alibaba Group. The law firm acted as legal counsel to Haier Electronics on the deal, which will further develop Haier’s logistics business.

According to the strategic investment arrangements, member companies of Alibaba Group will concurrently become the strategic shareholders of Haier Electronics and Quingdao Haier Logistics Co (a subsidiary of Haier Electronics), i.e. Ririshun Logistics.

Based upon Haier Electronics’ advantages in supply chain management, logistics warehousing and distribution and installation services, and Alibaba Group’s advantages in e-commerce ecosystem, the parties will jointly create a new and complete set of systems and standards for logistics distribution and installation services for household appliances and bulk merchandise.

In this strategic co-operation, Alibaba Group invests in Haier Electronics in a total amount of HKD2.822bn, among which Alibaba Group’s investment in Ririshun is HKD1.857bn with the establishment of a joint venture company, including: (1) subscription of 9.9 per cent of Ririshun’s shares in the amount of HKD541m; and (2) subscription of the convertible bonds issued by Haier Electronics in the amount of HKD1.316bn, which is convertible into 24.1 per cent of the equity in Ririshun in the future. Furthermore, Alibaba Group invests HKD965m in Haier Electronics through subscription of new shares in exchange for two per cent of Haier Electronics’ shares after the investment.

As the counsel for Haier Electronics in this project, King & Wood Mallesons provided full legal services to this deal. The leading partners of the KWM onshore transaction team are Lin Qingsong and Wang Jianxue and the leading partners of the KWM offshore transaction team are Raymond Wong and Candy Chan. Partner Li Qiang provided strong support to the project.