Business / Companies

Chinese HNA group in talks to buy Spanish soccer team

By Emma Gonzalez and Wang Wen ( Updated: 2015-09-17 17:48

Chinese conglomerate HNA Group, the parent of Hainan Airlines Co Ltd, could become the second Chinese enterprise to own a Spanish soccer team if negotiations to purchase Barcelona-based Real Club Deportivo Espanyol finally succeed.

The Hainan-based HNA Group, owner of China's fourth largest carrier, is in advanced negotiations with the Espanyol soccer team to purchase a 43 percent stake in the Catalan club for 10 million euros ($11.23 million), reported Spanish daily newspaper Sport this week.

"Chen Feng, chairman of the conglomerate, is personally handling the discussions and has travelled several times to Barcelona to meet the Espanyol executives", added the Spanish newspaper.

HNA officials declined to comment on the news while press representatives of Espanyol were not available for comment.

Although the negotiations started in June this year, real progress has only been made in the last few weeks. Nonetheless, talks are not expected to be completed until the beginning of 2016.

Hong Kong-listed investment group Fosum is also said to be interested in purchasing a 51 percent stake in the team. However, local media suggested that the Espanyol management would favor a HNA offer for the Catalan team as it would allow them to keep control of the team.

Chinese travel conglomerate HNA has several interests in Spain. In 2014, the company acquired a 29.5 percent stake of the Spanish hotel chain NH Hoteles, becoming its largest shareholder. Earlier this year, HNA was planning to acquire Air Europa, a wholly-owned subsidiary of Spanish firm Globalia.

Chinese companies are increasingly setting their eyes on European soccer teams to expand their business overseas.

In January, real estate giant Wanda Group Co bought a 20 percent stake in leading Spanish club Atletico Madrid for 45 million euros ($52 million), becoming the first Chinese company to invest in a major European soccer team.

"This trend of Chinese enterprises buying European soccer teams is only going to increase over the short term as Chinese companies explore a football expansion as a legitimate way to develop a company", explained Andrew Collins, chief executive officer at Shanghai-based technology and social media agency Mailman Group.

Espanyol, the second largest team in the city of Barcelona, has substantially benefited from a new distribution of television broadcast rights revenues to smaller teams in Spain's La Liga.

In fact, Spanish media reported that the revenues generated by broadcast rights have been a crucial issue during the negotiations.

"Getting broadcast exposure is also a primary motivation for Chinese companies", added Collins from Mailman.

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