Alibaba Group Holding Ltd. said Oct. 18 it will acquire a controlling stake in Chinese hypermarket operator Sun Art Retail Group Ltd. for approximately HK$28 billion, or US$3.6 billion, as part of its broader New Retail strategy of integrating online and offline resources in China's retail sector.

Sun Art shares rose 25.98% to HK$9.99 in morning trading in Hong Kong, following the announcement.

The e-commerce company said it will boost its aggregate direct and indirect stake in Sun Art to around 72% by acquiring 70.94% of equity interest in A-RT Retail Holdings Ltd. from French grocer Auchan Retail International SA and its subsidiary. A-RT owns an approximately 51% stake in the grocer.

Alibaba will consolidate Sun Art in its financial statements following the transaction. It appointed Sun Art CEO Peter Huang chairman of the company in addition to his current role.

The move comes nearly three years after Alibaba bought an aggregate direct and indirect 36.16% stake in the Hong Kong-based business, as part of a strategic alliance with Auchan Retail and Ruentex Group, to introduce solutions like omnichannel integration and a more personalized customer experience at Sun Art stores.

"Led by Chief Executive Officer Peter Huang, Sun Art has achieved impressive results in its digitalization, and pursued promising synergies with businesses across the Alibaba digital economy," Alibaba Chairman and CEO Daniel Zhang said in a statement. "As the COVID-19 pandemic is accelerating the digitalization of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our New Retail vision and serve more consumers with a fully integrated experience."

All Sun Art locations in China have joined Alibaba's Taoxianda and Tmall supermarket platforms as of Oct. 18, the Chinese online retailer said. Sun Art operates 481 hypermarkets and three mid-size supermarkets in the country as of June 30, according to the release.