AC Milan President Silvio Berlusconi has agreed to sell the club to a state-backed Chinese group -- "ending a three-decade-long stewardship of the football club" that launched him from a "little-known local entrepreneur to prime minister of Italy," according to Massoudi & Fontanella-Khan of the FINANCIAL TIMES. Fininvest, the holding company controlled by Berlusconi, said on Friday that it had signed a "preliminary contract" with a group of Chinese investors for a 99.93% stake in AC Milan that valued the club at €740M ($820M), including debt of €220M ($244M). News of the sale "ends month of speculation" over whether Berlusconi would part ways with the club and for the first time "revealed the identity of AC Milan's Chinese suitors." Han Li, a member of the Chinese consortium, was photographed lifting an AC Milan shirt and shaking Berlusconi's hand "outside the luxurious Villa Certosa in Sardinia, the site for many of the three-time Italian prime minister's most glamorous and salacious parties." Li was identified as a representative of a management group called Sino-Europe Sports Investment Management Changxing Co., which includes investors such as Haixia Capital and Yonghong Li (FT, 8/5). REUTERS' Segreti & Za reported a statement from the investors said that there were "other companies involved in the deal, some of which are controlled by the Chinese state," but gave no further details on their exact identity. Last month, a source said that private investment firm GSR Capital, with its co-founder and Chinese dealmaker Sonny Wu, "were among investors but the Fininvest statement did not mention either." The sale of AC Milan "is part of a wider effort by the 79-year-old former prime minister to reshape his business empire" to prepare for his own succession, disposing of "the most indebted businesses." The deal is due to be closed by the end of the year. Fininvest said that the buyers had committed to investing €350M ($388M) over the next three years into the club, "which has failed to win a major trophy" since '11. AC Milan, which reported a loss of €93.5M euros last year, "needs cash to put it on a par with the top European clubs," many now bankrolled by Gulf and Asian owners. PwC partner Emanuele Grasso said, "The deal is convenient because it has a low entrance price, but is an operation with a high value. The money (the Chinese) are putting down is to give value to a big brand, counting on the masses in Asia." The club "has weighed on the finances of the media tycoon." A source said, "It was not sustainable ... it was an indulgence that Berlusconi could not afford anymore" (REUTERS, 8/5).
END OF AN ERA: BLOOMBERG's Lepido & Ebhardt reported Chinese investors "will now control" both Milan teams following the recent investment by Suning Holdings in Inter Milan. The "AC Milan deal underscores China’s push" to buy football assets across the globe. AC Milan is popular in China, "where Italy’s Serie A became the first top league to be broadcast by state television." The Chinese investors were assisted by Rothschild & Co. as financial adviser and Gianni, Origoni, Grippo, Cappelli & Partners as legal advisers. Fininvest was advised by Lazard and BNP Paribas and the Italian law firm Chiomenti (BLOOMBERG, 8/5).
