CMC buys Chinese TV stations from News Corp

Government-backed private equity firm China Media Capital has agreed its first deal, reportedly valued at around $160m.

China Media Capital (CMC), a Chinese government-backed alternative investment management company, will acquire a controlling stake in three Chinese television channels and a library of Chinese films.

The transaction, which has been reportedly valued at around $160 million, represents CMC's first since being established in April 2009.

The television channels include general entertainment channels Xing Kong and Xing Kong International, and popular music-oriented Channel [V] Mainland China. The Chinese movie library Fortune Star has a total of 757 Chinese-language titles.

CMC will pay an undisclosed amount to purchase them from global media conglomerate News Corporation, according to a statement. Sources told the Financial Times the deal was worth around $160 million, given the assets were worth around $300 million.

A News Corp spokeswoman declined to provide any further finanical details or the size of the minority stake that News Corp will retain.

News Corp will establish a joint venture with CMC that is headquartered in Beijing, with offices in Shanghai, Guangzhou, Chongqing and Hong Kong.

“This partnership is an extension of our long-term cooperation with News Corp. The entry of Chinese capital into international media market will help facilitate its changes and development. Today’s agreement represents a first step into that direction. CMC will continue our efforts in developing operational and investment platforms for international media,” Li Ruigang, chairman of China Media Capital, said in the statement.

Established in April 2009, CMC bills itself as China's first media sector-focused alternative investment management company, investing in both China and the international market. Backed by China's National Development and Reform Commission, CMC’s founding partners include Shanghai Media Group, China’s second largest media group, and China Development Bank, according to the company’s website.

Targeting a commitment of RMB5 billion (€561.1 million; $738.2 million), CMC’s first private equity fund reportedly held a first close on RMB2 billion in June. The firm focuses on growth capital, corporate restructuring and MBO/privatisation financing opportunities in companies with enterprise value between RMB300 million to RMB2 billion, according to its website.

In addition to Xing Kong and Channel [V], News Corp’s other broadcast channels in China include Star Movies and National Geographic Channel. It also owns a minority stake in Phoenix Satellite Television, which runs Phoenix Chinese Channel, Phoenix InfoNews and Phoenix Movies Channel. The firm’s other investments in China include Chinese WSJ.com, MySpace China and ESPN Star Sports.