Recently, online retail giant Alibaba Group Holding Ltd (NYSE:BABA) has expanded its business to several sectors as a way to diversify and break Chinese market barriers. Here are three deals worth noting from South China Holdings, Walt Disney Co (NYSE:DIS), and UBM Plc.
Earlier this month, Alibaba agreed to buy the South China Holdings, as well as other media assets, in a deal valued at $265.6 million. The group owns the South China Morning Post, Hong Kong’s leading English newspaper, which reports freely on topics considered “sensitive” in China, a country known for its restrictions on international media sources. The deal also includes the newspaper’s outdoor advertising and digital assets. Some are skeptical about the paper’s ability to maintain its “editorial independence” under Alibaba. However, according to SCMP Group, this deal stems from an “uncertain” future for publishing as the group believes the Alibaba acquisition will “[unlock] greater value” within the paper. SCMP Group plans to use the proceeds of the sale for a special cash dividend.
Joe Tsia, executive vice chairman of Alibaba Group stated, “Our vision is to expand the SCMP’s readership globally through digital distribution and easier access to content.” Similarly, Robin Hu, CEO of SCMP stated, “With proven expertise especially in mobile Internet, Alibaba is in an excellent position to leverage technology to create content more efficiently and reach a global audience.” Alibaba CEO Jack Ma is taking a similar step as Amazon did, when the online retail giant acquired the Washington Post in 2013 for $250 million.
Shortly after the Alibaba and SCMP was announced, the retail giant and Walt Disney Co announced an exclusive license agreement for an OTT (over the top service), Disney Life, which connects Chinese customers to Disney entertainment. Disney Life contains movies, series, e-books, and games from Disney and Pixar, as well as travel services and Disney theme parks information. This deal is reported to help Alibaba confront barriers to Chinese market entry for foreign T.V. networks. Mr. Luke Kang, managing director of The Walt Disney Company in Greater China stated, “Disney and Alibaba share an ambition to exceed our audience’s expectations. DisneyLife directly connects us to China’s digital population and provides millions of kids and families the ability to explore and engage with Disney.” The service is only offered from a mickey-mouse shaped set-top box and comes with a one-year subscription.
