BEIJING - In a speedy deal hatched over a few drinks, China's biggest e-commerce company Alibaba is buying half of the country's most successful football club Guangzhou Evergrande for US$192 million (S$240 million).
For Jack Ma, Alibaba Group Holding's [IPO-ALIB.N] billionaire founder and confessed football agnostic, it may seem a fanciful move, the latest in a string of recent acquisitions beyond Alibaba's traditional e-commerce businesses.
Guangzhou Evergrande is owned by Hong Kong property firm Evergrande Real Estate Group Ltd, and the team is coached by World Cup winning manager Italian Marcello Lippi. The club won the 2013 AFC Champions League, the first Chinese side to win the region's premier club competition in its current format, and finished fourth in the World Club Cup.
Alibaba and its affiliates have spent more than $6 billion this year on assets in finance, entertainment and healthcare, seeking to dig deeper into customer wallets ahead of a US stock listing that could be the biggest tech company IPO to date, and value Alibaba at $152 billion.
Beyond its core online commerce businesses, Hangzhou-based Alibaba now offers Internet TV, owns 16.5 per cent of online video site Youku Tudou Inc and has set up a film company in Hong Kong after taking control of ChinaVision Media Group.
"We're not investing in football, we're investing in entertainment," Ma said. "Alibaba's future strategies are health and entertainment."
But analysts weren't convinced.
"Fifty per cent seems like a big stake to get a deal on content," said Bryan Wang, Beijing-based vice president at Forrester Research.
At a news conference on Thursday, Ma and Evergrande Real Estate's billionaire chairman Xu Jiayin said the deal was hatched over dinner and drinks, and wrapped up in just a few days.
The idea of Ma investing in the football club - which was mired in a match-fixing scandal several years ago - was only raised on Monday, said Xu. "I got Jack drunk in Hong Kong and afterwards asked him if he'd invest, and he said 'okay'," Xu said. "The discussions were finished within 15 minutes yesterday morning."