May 24, 2016 / 8:04 AM / in 2 years

Chinese group buys control of sports rights firm MP & Silva

MILAN/SHANGHAI (Reuters) - A Chinese investment group has bought a majority stake in Italian-owned MP & Silva (MPS), valuing the sports media rights firm at over $1 billion (685 million pounds), the latest in a series of global sports-related deals by investors from China.

Chinese brokerage Everbright Securities (601788.SS) and internet entertainment company Beijing Baofeng Technology 300431.SZ bought a 65 percent stake in the business through an investment vehicle, MPS said in a statement on Tuesday.

Everbright said in a statement emailed to Reuters on Wednesday that MPS was valued at over $1 billion, confirming a figure two sources had told Reuters ahead of the deal’s announcement.

The acquisition, which adds to a growing stable of Chinese-owned soccer assets worldwide, will help MPS target the fast-growing China sports market, which Beijing is hoping will be worth over 5 trillion yuan by 2025.

“China has the most sports fans in the world, and the sports market here is now one of the hottest investment sectors,” Everbright chief executive Xue Feng said in the statement.

MPS Chief Executive Marco Auletta told Reuters the stake sale process had seen high demand from international investors.

“Everbright and Baofeng have emerged as the right partners to support our international growth and help us expand in adjacent fields such as virtual reality, where Baofeng is a key player in China,” he said.

Auletta said the management team has retained shares in the business and will work closely with the new stakeholders to tap into Asian markets.

A source had earlier told Reuters that Everbright and Baofeng were to take a stake of about 60 percent in MPS.

Headquartered in London and Singapore with an annual turnover of $600 million, MPS distributes media rights for a series of sports federations and clubs, including Italy’s top-flight Serie A soccer league.

The deal is expected to give MPS, founded in 2004, additional firepower to expand internationally, especially in the rapidly growing Chinese market.

“We are confident that, thanks to this partnership, MP & Silva will be able to strengthen its leadership position in the market and introduce new ground-breaking innovations,” Baofeng CEO Larry Feng said.

Baofeng plans to develop a sports channel and a series of sports apps.

CHINA BUYS INTO SPORT

Italian businessmen Andrea Radrizzani and Riccardo Silva had owned 80 percent of MPS. Carlo Pozzali is the third founding partner and was a minority shareholder in the business.

The company’s former owners will retain a combined 35 percent stake and continue to play a “significant role” in the group after the deal, MPS said.

Chinese President Xi Jinping, an avid soccer fan, has made it a mission for the country to win the World Cup and the recent string of deals is raising China’s profile in the game.

Property group Dalian Wanda, which last year bought a 20 percent stake in Champions’ League finalists Atletico Madrid, has also acquired Swiss sports-marketing company Infront. Chinese investors are also circling soccer “super agency” Stellar Group, Reuters reported last week.

Former Italian Prime Minister Silvio Berlusconi opened exclusive talks with a group of Chinese investors this month over the potential sale of a majority stake in soccer club AC Milan and last week a Chinese magnate agreed to buy English soccer club Aston Villa.

UBS advised MP & Silva on the deal while China International Capital Corporation (CICC) and online deals platform DealGlobe worked with Everbright and Baofeng.

Additional reporting by Pamela Barbaglia in London, Writing by Stephen Jewkes; Editing by David Goodman and Muralikumar Anantharaman

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