Honduran clothing manufacturer Alibaba announces deal to buy clothing manufacturer JVC

HONDURAS — Alibaba Inc. said Wednesday it has signed a memorandum of understanding with JVC Holding Corp. for an agreement to buy JVC Holdings Inc. for about $4 billion.

The deal would be the second for Alibaba and its biggest acquisition since 2012.

The companies announced the deal on Wednesday.

Alibaba said it would acquire the clothing and apparel companies through its Alibaba Retail Holding Corp., which is controlled by the Hong Kong-based holding company.

JVC will retain majority ownership in Alibaba and will continue to invest in JVC through the company’s subsidiaries, Alibaba said.

JVP will be responsible for operational and marketing activities.

The agreement is subject to regulatory approval, and it will be completed in the fourth quarter of 2021, Alibaba and JVC said in a joint statement.

The JVC deal comes as Alibaba’s growth has faltered.

The Chinese e-commerce company saw a loss of more than $3 billion in the third quarter of this year as the U.S. e-retailers, such as Amazon.com Inc., Amazon.co.jp, and Alibaba Group Holding Ltd., ramped up sales and the Chinese economy slowed.

Alibaba has been battling with Amazon, which controls Amazon.ca and Amazon.de in Canada, to control online sales.

Alibaba’s share price fell to a record low of $8.36 on Wednesday, after a rally of more 20% over the past three weeks.

The company reported a net loss of $5.4 billion in its most recent quarter, though it said its profit margin for the quarter was higher than the company anticipated.

The loss in the latest quarter was driven by a $1.7 billion writedown on its retail businesses, including the $1 billion in sales from the Alibaba online marketplace, said the company.

The online business reported a $2.9 billion loss, compared with a profit of $1,742 million in the previous year.

Alibaba had a profit last year of $20.8 billion, up from $18.2 billion in 2015, the company said in its fourth-quarter financial report.

In the latest fiscal year, Alibaba posted net sales of $26.9bn.

Analysts expect the Alibaba-JVC deal to help the company grow its business by bringing new customers and boosting the value of its portfolio of businesses.

Alibaba, which is owned by Chinese billionaire Jack Ma, is expected to benefit from JVC’s investment in its digital services business, which has seen the emergence of mobile payments and payment services.