Chinese mainland e-commerce giant JD.com has denied reports that it reached an agreement four months ago to acquire a majority stake in Hong Kong grocery chain Kai Bo Food Supermarket, saying in response to an enquiry from China Daily on Tuesday that the report of the acquisition “significantly deviates from the facts”.

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Reports indicated that JD.com invested approximately HK$4 billion ($509 million) in acquiring about 70 percent of Kai Bo Food Supermarket, including its retail network and property assets.

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The deal reportedly included a three-year transition period, during which JD.com would not assume direct control of Kai Bo’s operations. Instead, Kai Bo’s founder, Lam Hiu-ngai, and the current management team would continue overseeing the company, with no significant changes in personnel or operations.

Founded by Lam in the 1990s, Kai Bo operates around 90 stores in Hong Kong and employs more than 1,000 staff.  

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If the acquisition price of HK$4 billion were accurate, it would value Kai Bo at around HK$5.7 billion — more than four times higher than the market capitalization of Hong Kong Technology Venture Company, the parent firm of HKTVmall, which is HK$1.32 billion.  

It is reported that Kai Bo’s parent companies, Moretide Investments and Oceanus Food Trading, have issued a notice to their partner merchants, noting that Kai Bo will restructure its business and transfer its supermarket and wholesale operations to a newly established company in Hong Kong from Aug 1.

Contact the writer at irisli@chinadailyhk.com