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China Media Capital – News Corp Chinese channel acquisition
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Undisc. value
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| Synopsis News Corp sells shares in three Chinese TV channels to China Media Capital | ||
| Firm | Client | Role |
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Weil Gotshal [Lead partners: Peter Feist, Henry Ong, Kevin Ban and Jeffrey Osterman]
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CMC
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International counsel |
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King & Wood
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New Corp
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PRC counsel |
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Skadden
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News Corp
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International counsel |
In a pullback from the market after many challenging years, News Corp has finally sold shares of its three Chinese TV channels to China Media Capital (CMC), a fund backed by one of the country’s largest media company.
The deal would see CMC complete its very first investment and acquire a controlling stake in News Corp's Xing Kong, Xing Kong International and Channel Mainland China channels, along with its Fortune Star Chinese movie library, together valued at around U$50m.
Weil Gotshal advised CMC on the acquisition of the controlling stake, its legal structuring and on the terms of the ongoing relationship between CMC and News Corp. The firm is CMC’s long-term legal advisor, having previously advised CMC on its 2007 fund formation.
News Corp and global rivals such as Time Warner and Viacom held out great hope for China when they launched TV channels there but results have been largely disappointing as authorities have limited their broadcast mainly to Guangdong.
Despite strict restrictions on foreign interest, the TMT sector continues to be active both internationally and domestically. Weil Gotshal facilitated the US$50m Providence Equity Partners (PEP) - Baidu investment in January this year, just one highlight on a long list of other consolidation and M&A transactions in the TMT sector. Han Kun, DLA Piper, Davis Polk and Morrison & Foerster also recently advised on the Hurray! and Ku6 merger. “Media and technology industries are currently very active and a lot of our clients are looking broadly in the TMT space,” said Peter Feist, partner at Weil Gotshal.
Established in 2009, CMC is a PE fund with US$739m in assets under management and a focus on investments in the media industry. It is backed by Shanghai Media Group, the dominant player in Shanghai, as well as China Development Bank and China Broadband Capital. ALB
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