Berlusconi sells AC Milan to Chinese investors

By The Citizen

Silvio Berlusconi has agreed to sell AC Milan 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.

Fininvest, the holding company controlled by Mr Berlusconi, said on Friday that it had signed a 'preliminary contract' with a group of Chinese investors for a 99.93 per cent stake in AC Milan that valued the club at €740m including debt of €220m.

News of the sale ends month of speculation over whether Mr Berlusconi would part ways with the club and for the first time revealed the identity of AC Milan's Chinese suitors.

Chinese investors have been snapping up stakes in European football clubs at an unprecedented pace over the past year. English Premier League side West Bromwich Albion was acquired on Friday by Guochuan Lai, a 42-year-old Chinese businessman. In June, Chinese retail group Suning Holdings paid â‚¬270m for a 70-per-cent stake in Inter Milan, the local rival to AC Milan.

Han Li, a member of the Chinese consortium, was photographed lifting an AC Milan shirt and shaking Mr 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.

Mr 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.

Yonghong Li, the chairman of the management group, was identified as 'the main sponsor of the investor group and with whom Fininvest has been negotiating for some time', according to a statement by the holding company. 'Other investors will acquire shares of AC Milan, some of which are state-controlled entities. Among those investors are companies active in the financial industry and others in industrial sectors,' Fininvest added.

Under the terms of the agreement, the Chinese investors have agreed to pump €350m into the club over a three-year period, with a €100m to be injected at the time of closing. It also required the buyers to make 'a €100 million deposit, confirming the commitments assumed, of which €15 million is payable upon signing and €85 million within 35 days of signing'.

The deal marks the end of an era for Mr Berlusconi, as well as for many Italians. The flamboyant businessman acquired the ailing football club in the mid-1980s, when he was a small-time media and real-estate entrepreneur and transformed it into Italy's most successful team. Under his ownership AC Milan won eight Serie A titles and five European Champions League, more than any other Italian club.

AC Milan, however, was more than just a football club for Mr Berlusconi. The team's back-to-back European Cup victories, in 1989 and 1990, created an ideal platform for Mr Berlusconi to launch his political career at time when Italy was undergoing a massive political corruption scandal and biggest institutional crisis since the second world war.

Over the past two decades, Mr Berlusconi has been dogged by corruption and sex scandals that have weighed on his political career, business operations and the football club. Recently he admitted that his legal troubles had distracted his focus from running the club.

West Brom's new owner, Mr Lai, is the controlling shareholder in Chinese investment group Yunyi Guokai (Shanghai) Sports. Although the price he paid has not been disclosed, it is estimated to be between £150m and £200m, according to people familiar with the transaction.

His move means the four main football clubs in the West Midlands — West Brom, Aston Villa, Birmingham City and Wolverhampton Wanderers — now have Chinese owners. - FT.