An employee arranges stools at a section displaying Haier television sets inside a Suning store in Shanghai August 26, 2013.
Chinese appliance maker Haier Electronics Group Co Ltd agreed to team with e-commerce giant Alibaba Group to further develop its logistics business, in a move that sent Haier Electronic's stock to a 14-year high.
The joint venture, announced through a stock exchange filing, includes several parts, for a total deal value of HK$2.8 billion ($361.09 million).
Haier's shares soared 20 percent to HK$22.35 in early morning trade, the highest since February 2000, outpacing a 0.7 percent gain in the benchmark Hang Seng Index. The company's stock is up 95 percent on the year to date.
Haier Electronics is muscling in on their distributors and expanding into logistics and e-commerce in a bid to win the fierce battle for margins in the world's biggest home appliance market. The company's largest shareholder is KKR-backed Qingdao Haier Co Ltd, which owns a 47.9 percent stake.
The agreement also comes amid a flurry of deals by fast growing Alibaba, which has bought into several companies recently and is preparing what could be a roughly $15 billion IPO.
As part of the deal, Alibaba will hold a 9.9 percent stake in the joint venture with Hong Kong-listed Haier Electronics, which manufactures and sells washing machines and water heaters.
Alibaba will also subscribe for about 2 percent of Haier Electronics' enlarged share capital at HK$18.413 per share and HK$1.32 billion worth of convertible and exchangeable bonds, Haier said in the filing to the Hong Kong bourse early on Monday.
The deal is aimed at leveraging on Haier's distribution capacity in third and fourth tier cities and Alibaba's e-commerce platform Tmall.com to distribute large-sized goods such as home appliances and furniture.
Alibaba Group's plans to revolutionise China's retail industry, investing $16 billion in logistics and support by 2020, will open up China's vast interior and bring access to hundreds of millions of potential new customers.
In September, investment company KKR & Co LP said it had agreed to buy a 10-percent stake in Qingdao Haier, gaining exposure to China's home appliances market with its biggest investment in the country to date.
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