China’s e-commerce titan Alibaba Group announced today that it has agreed to transfer the operations of Tmall online pharmacy business to Alibaba Health Information Technology [Alijk.com], the Hong Kong-listed health affiliate of the company, in exchange for the newly issued shares and convertible bonds of the latter. The deal is expected to be finalized by the third quarter of this year, according to the company.

Alibaba Group currently owns a 38.1% stake in Alibaba Health, formerly CITIC 21CN which is a licensed online drug seller with a vast pool of pharmaceutical product data. Alibaba Group and Yunfeng Capital, a venture capital fund co-founded by Alibaba chairman Jack Ma, acquired a combined 54.3% stake in CITIC 21CN in January last year, with the company renamed Alibaba Health that August.

Upon completion of the deal, Alibaba Group’s effective equity ownership of Alibaba Health will increase to about 53%, making the company a consolidated subsidiary of Alibaba Group.

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Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.