
CMC, CITIC Capital acquire 13% of City Football Group
China Media Capital Holdings (CMC Holdings) and CITIC Capital have paid $400 million for a 13% stake in Abu Dhabi-based City Football Group (CFG), which owns the Manchester City Football Club and other related businesses.
The investment values CFG at $3 billion and it came after more than six months of discussions among the parties, according to a statement. It was announced weeks after Chinese President Xi Jinping visited Manchester City's training ground.
The Chinese investor group will acquire new shares issued by the CFG, in addition to the ordinary shares held by Abu Dhabi United Group, currently the sole shareholder. That entity is owned by Sheikh Mansour bin Zayed Al Nahyan.
Manchester City, which currently sit at the top of the English Premier League, has returned profit for the first time since being bought by Sheikh Mansour for $360 million in 2008. Prior to that, the club was owned by former Thailand Prime Minister Thaksin Shinawatra.
The investment in CFG is expected to see CMC and CITIC Capital bring Manchester City in China to play matches, as well as to help CFG expand internationally. The company also owns New York City FC and Melbourne City FC and is a minority shareholder in Japanese club Yokohama F. Marinos.
"Football is now at a fascinating and critical stage of development in China," Ruigang Li, CMC chairman, said in a statement. "We see unprecedented growth opportunities in both its development as an industry, being China's most watched sport, and its inspirational role bringing people of all ages together with a shared passion."
Li founded Chinese media-focused private equity firm CMC Capital Partners before launching investment platform CMC Holdings. Earlier this month, Oriza Holdings, Tencent Holdings and Alibaba Group jointly committed RMB10 billion ($1.6 billion) to the platform, which focuses on managing long-term strategic investments.
Financial assets with shorter investment holding periods will be managed by the private equity fund.
CMC Capital Partners, which was founded by Li in 2010, is currently raising its latest media-focused fund, which is targeting $1 billion across US dollar-denominated and renminbi tranches. The group's most recent transaction is a RMB8 billion deal for broadcasting rights to matches from China's domestic football league.
Several Chinese groups have made high-profile investments in sport businesses overseas and domestically. Dalian Wanda Group, controlled by Chinese billionaire Wang Jianlin, recently acquired World Triathlon Corporation, adding it to a portfolio that already includes sports marketing firm Infront Sports & Media and a 20% stake in Spanish football club Athletico Madrid.
In China, Wanda's activities include participating in a funding round for sports channel LeTV Sports.
A spin-off from Leshi Internet Information & Technology (LeTV), LeTV Sports owns broadcast and media rights to 121 events in 17 sports categories, with 4,000 matches for live broadcast. LeTV, which started out as a video-streaming platform before getting into licensing and production, picked up the Hong Kong broadcast rights to England's Premier League in September for a reported $400 million.
Meanwhile, Alibaba has set up a sports unit alongside Sina Corp. and Yunfeng Capital, a PE firm backed by Alibaba co-founder Jack Ma. Alibaba has forged partnerships with football clubs Bayern Munich and Real Madrid and with NBA star Kobe Bryant, and last year paid $192 million for a 50% stake in Chinese super league team Guangzhou Evergrande in June 2014.
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