Spurred by President Xi Jinping’s call for China to become a soccer power Chinese investors have splurged almost two billion euros in buying stakes in European football clubs.
However the buying hysteria caught the attention of the assertive Chinese regulators and the state-owned «People’s Daily» warned in September 2016 about the potential for a football bubble.
Last weekend the long running saga of the sale of Italian club AC Milan finally came to a close when a Chinese consortium led by businessman Li Yonghong eventually acquired the team. The closure brought to an end a protracted deal plagued by setbacks which took in the region of eight months to complete.
Cash Injection Expected
The 740 million-euro purchase by Li’s vehicle, Rossoneri Sport Investment Lux, from Fininvest, the holding company of businessman Silvio Berlusconi, was completed late last week, the companies said in a joint statement.
Rossoneri, which is also the Italian nickname of AC Milan, reaffirmed its commitment to strengthen the club’s finances through a recapitalization and a cash injection, the statement said.
One Win One Loss
Going the other way however, reports out of China say that Shenzen based Lander Sports Development has terminated a deal to acquire an 80 percent stake in St. Mary’s Football Group, the owner of English Premier League team Southampton Football Club, according to a statement by the Shenzhen-listed company.
The company cited policy and market changes that have taken place since its trading halt since October--when the company revealed plans to buy an undisclosed stake in the club--as reasons the deal has been scrapped, the statement released Sunday said.
Prudence Now Advised
Though reports in January said that an agreement had been reached, the deal did not actually close the company acknowledged.
China introduced tighter restrictions on outbound investment in December and has advised Chinese companies to make decisions prudently in cross-border deals.
