Alibaba buys 50% stake in Chinese football club

Alibaba has agreed to buy 50 per cent of Guangzhou's top-rated Evergrande football club, the latest in a string of acquisitions by the Chinese ecommerce giant ahead of a blockbuster US listing later this year.

Alibaba has spent more than $6bn over the past 12 months as it shifts its focus from ecommerce to more diverse areas with deals aimed at bolstering its appeal ahead of its keenly anticipated initial public offering.

At a news conference in the southern Chinese city of Guangzhou on Thursday, Jack Ma, Alibaba's chairman, said the company will pay Rmb1.2bn ($192m) for the stake in Evergrande FC.

Mr Ma appeared alongside real estate tycoon Xu Jiayin, owner of Evergrande Real Estate which bought the club in 2010, to announce the deal.

It is unclear whether the stake is meant to complement Alibaba's core business, which increasingly focuses on entertainment, or whether the football club is simply a trophy asset.

Ricky Lai, an analyst at Hong Kong-based Guotai Junan International Holdings, said he thought Mr Ma was mainly interested in the publicity Alibaba would gain "by having the corporate name on winning football jerseys".

"I think their strategy in acquiring the football team is to improve branding," he said.

"The reason we will get into soccer is because at Alibaba our strategy is health and happiness," Mr Ma said. "Investing in soccer is investing in happiness."

At one point during the press conference, Mr Ma leaned over to Mr Xu and said: "I don't know how much a soccer team is worth, so you tell me."

"It was cheap," replied Mr Xu, to which Mr Ma told the audience in mock seriousness: "It actually was cheap."

Mr Ma added: "I think not understanding soccer doesn't matter. I also didn't understand retail, ecommerce or the internet [before investing in them]."

Alibaba accounts for about 80 per cent of transactions in China's ecommerce market and is expected to be valued at anywhere from $80bn to $150bn when it lists. No date has been set for the IPO, but analysts expect it to be sometime in the third quarter.

Following its purchase by Evergrande Real Estate, Evergrande FC has become one of China's most successful soccer clubs under the leadership of former Italian national team coach Marcello Lippi. Last year it became the first Chinese team to win the Asian Champions League.

Alibaba's shopping spree so far has centred primarily on the internet sphere. In April Alibaba snapped up an 18 per cent stake in Youku Tudou, China's largest video hosting website, for $1.22bn.

In March it paid more than $800m for a 60 per cent share of Hong Kong-listed ChinaVision Media Group, securing the rights to a trove of television shows, films and games.

In February, Alibaba said it would take control of AutoNavi, a mapping software group, in a $1.6bn deal. It has also bought stakes in four US-based ecommerce companies including ShopRunner, a delivery group.

Alongside its push into the US market, its interest in logistics has grown as Chinese ecommerce has boomed. Last month Alibaba took a $249m stake in Singapore Post, setting up a logistics beachhead in southeast Asia.

Shares in Evergrande Real Estate were up 3.3 per cent to HK$3.72 on Thursday afternoon in Hong Kong.

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