Chinese investors to buy Italy's AC Milan for $820m

The consortium will acquire a 99.93% interest in the club held by Fininvest, which is controlled by Silvio Berlusconi, the media tycoon and former Italian prime minister. The deal values AC Milan at EUR740 million ($820 million), including debt of EUR220 million. The new owners have also agreed to inject EUR350 million of fresh capital into the club over a three-year period.

Haixia is the only investor identified in an AC Milan statement; others are described as active in the financial services and industrial sectors. Some are state-controlled. Two individuals are mentioned: Han Li, the Chinese group's representative; and Yonghong Li, who is described as the main sponsor of the group and chairman of the acquisition vehicle, Sino-Europe Sports Investment Management Changxing.

Established in 2010 as a state-backed cross-strait investment fund manager, Haixia is also supported by Taiwan's Fubon Group and an investment unit of the Fujian provincial government. It has previously served as a cornerstone investor in China Cinda Asset Management's IPO and was a member of the consortium that bought a 29.99% stake in Sinopec's gas station business for RMB107.1 billion ($17 billion).

This is not the first Chinese acquisition of an Italian football club. In June, electronics retailer Suning paid EUR270 million for a 70% stake in Inter Milan, which shares the Stadio Guiseppe Meazza with AC Milan.

Both clubs have a rich footballing pedigree, with AC Milan having alone having won 18 Italian league titles and seven European Cup and UEFA Champions League trophies. However, the club's on-field performance has suffered in recent years. The statement said that Finivest's objective during negotiations was to ensure AC Milan had enough money to compete, "with greater financial resources now more essential for competing with the top football clubs of the world."

Chinese capital has also found its way into the English Premier League. Last year, CMC Holdings - an investment platform created by CMC Capital Partners - and CITIC Capital paid $400 million for a 13% stake in Abu Dhabi-based City Football Group, which owns the Manchester City and other related businesses. Chinese entrepreneurs have since agreed full acquisitions of Aston Villa and West Bromwich Albion. The latter deal was announced last week.

Viewed more broadly, these transactions represent growing Chinese interest in entertainment content of all kinds as investors seek to monetize changes in domestic media consumption.

Suning's investment in Inter Milan can be seen in the context of its efforts to build a greater online presence, which has also led to acquisitions of video streaming assets. Dalian Wanda Group, meanwhile, has in the last year purchased World Triathlon Competition and marketing specialist Infront Sports & Media. Then in May, two Chinese investors agreed to buy MP & Silva, one of Infront's rivals and a major player in the distribution of television and media rights to global sports events.

Activity overseas has been more than matched by activity at home. Last year, CMC paid a record $1.3 billion for broadcast rights to matches in China's domestic football league - a step-up that reflects the huge sums of money free-spending entrepreneurs are pumping into local clubs, enabling them to attract better-quality players.

With all these investments, there are also hints of soft power and policy-driven agendas. Culture and entertainment is one of the pillar industries in China's latest five-year plan, which outlines the government's economic priorities. Support for the domestic sports was also the subject of a State Council guideline that envisaged creating an industry worth RMB5 trillion by 2025.

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• Topics
• Greater China
• Europe
• Buyouts
• Media
• Consumer
• China
• Haixia Capital