China's M&A Gold
China may not have been able to emulate its showing at the Beijing Olympics in Rio this year, ending the medal tally in third place behind the U.S. and the U.K. But the nation has gone in the opposite direction when it comes to mergers and acquisitions involving sporting assets.
Whether that's just their love for the game or a sound investment decision remains to be seen. What's clear, however, is that China's participation is increasingly becoming a headache for traditional players.
Of the 50 professional sports deals globally that have involved a Chinese buyer, 33 were announced since the third quarter of 2013, according to data compiled by Bloomberg. Asia's largest economy was also the second-biggest buyer of sports franchises during that period, beginning to rival the U.S., the world's biggest market for such transactions.
China is starting to nip at North America's heels in terms of volume, too. A few blockbuster transactions -- such as the recent $4 billion acquisition of mixed martial arts franchise the Ultimate Fighting Championship by a group including private equity firms KKR and Silver Lake Partners -- are keeping the U.S. ahead, but buyers from Beijing and Shanghai are becoming increasingly aggressive, especially when it comes to soccer teams, as I noted in March. They've also been more consistent, with a steady stream of deals.
Buyers from China were also among the bidders for the UFC, and may have been instrumental in driving up the price of the franchise.
As an ardent soccer fan, you might expect President Xi Jinping to give his imprimatur to other deals in the sector. What's certain is that Chinese buyers will doubtless continue to embrace their competitive M&A streak. And that means players from other countries are going to have to work that much harder to win gold in the corporate arena.
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