China’s IDG to acquire 20% of France-based Olympique Lyonnais

According to a statement, IDG will buy 11.59 million new shares of OL at EUR3.34 apiece, representing a premium of 18.54% of its last trading price. The Chinese GP will also buy 200,625 convertible bonds at EUR305.34 apiece, a 60.71% premium to the last traded price. IDG will be subject to a two-year lock-up period.

The new capital will be used to reduce OL's debt burden - which has risen in part due to the construction of a new stadium - and lower financing costs. As part of the agreement, the two parties will set up a Chinese joint venture - owned 55% by IDG and 45% by OL - to help promote the OL brand in mainland China, Hong Kong, Macau and Taiwan. IDG will get two to three seats on OL's board.

The deal, which is subject to shareholder and regulatory approval, is expected to close in the fourth quarter of this year.

Olympigue Lyonnais was founded in 1950 and it was reconstructed under the OL umbrella in 1999. Listed on the Paris bourse, OL has five sources of revenue: ticketing; sponsorship and advertising; marketing and media rights; brand-related business; and player transfers. Total revenue came to EUR218.1 million last year, up from EUR103.5 million in 2015.

The deal comes shortly after a Chinese consortium agreed to buy leading Italian football club AC Milan. Haixia Capital, an investment firm controlled by China's State Development & Investment Corporation, is among the investors. In June, electronics retailer Suning paid EUR270 million for a 70% stake in Inter Milan, which shares a stadium with AC Milan.

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 earlier this month.

Earlier this year, IDG made a partial exit from Super Sports Media - which holds the mainland China broadcast rights for English Premier League football matches - through a reverse merger with Hong Kong-listed comic book publisher Culturecom Holdings.

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• Topics
• Greater China
• Consumer
• Media
• Expansion
• Growth capital
• China
• Europe
• IDG Capital Partners