Alibaba agrees to buy South China Morning Post in Hong Kong (updated)

Great Wall Pan Asia Holdings

11/12/2015 18:41

(Adds Breakingviews link) 
    By Matthew Miller 
    BEIJING, Dec 11 (Reuters) - Alibaba Group Holding Ltd 
 BABA.N  has agreed to buy Hong Kong's flagship English-language 
newspaper, the South China Morning Post (SCMP), in the most 
politically sensitive acquisition by the e-commerce giant to 
date. 
    Alibaba and SCMP Group Ltd  0583.HK  announced on Friday 
that the Hangzhou-based company would buy the 112-year-old 
newspaper and other media properties for an undisclosed amount. 
    The purchase, which follows a string of media deals by 
Alibaba, is likely to raise concerns in Hong Kong, where the 
South China Morning Post occupies an important position among 
the English-speaking elite who still dominate the former British 
colony. 
    Chinese-language dailies may be more influential than the 
Post, but changes in its editorial direction are seen as a 
barometer for press freedom under Chinese rule. 
    Alibaba has acquired or invested in a growing portfolio of 
media and content companies in recent years. In June, the 
company agreed to pay $194 million for an undisclosed stake in 
the China Business News, the domestic financial media firm. 
 urn:newsml:reuters.com:*:nASB09QP5   
    "The SCMP has iconic status in the region, with a strong 
reputation internationally for the quality and credibility of 
its journalism over the years," Joe Tsai, executive vice 
chairman of Alibaba Group, said in a letter to SCMP readers. 
    "Like many print media, however, the SCMP faces challenges 
amid the dramatic changes in the way news is reported and 
distributed. But these changes play to Alibaba's strengths, 
which is why we believe the two companies complement each other 
well." 
    Alibaba Chairman Jack Ma is no stranger to controversy at 
the newspaper. 
    In 2013, a reporter for the Post quit after quoting Ma as 
having made remarks in support of Beijing's violent crackdown on 
pro-democracy protesters in Tiananmen Square in 1989. Ma denied 
at the time that he had made such an assertion. 
    Tsai sought to address concerns about editorial independence 
in his letter. 
    "In reporting the news, the SCMP will be objective, accurate 
and fair ... day-to-day editorial decisions will be driven by 
editors in the newsroom, not in the corporate boardroom." 
    However, some SCMP staff members said the takeover was 
unlikely to have much impact over the publication's content, and 
greeted the news with resignation. 
    "The SCMP has not had an editorial balance for more than a 
decade. We don't think that will change under a mainland Chinese 
owner," said an editor who has worked at the newspaper for more 
than a decade. 
    "You can expect a Chinese angle on every story." 
    Friday's agreement includes SCMP Group's other media assets, 
such as licenses to the Hong Kong editions of Esquire, Elle, 
Cosmopolitan and Harper's Bazaar.  urn:newsml:reuters.com:*:nBw3Kw88ka 
    In November, the publisher said it had received a 
preliminary approach by an unidentified third party interested 
in its media properties, and media outlets had reported Alibaba 
was the potential buyer.  urn:newsml:reuters.com:*:nL8N13L04I 
    Financial terms of the deal were not disclosed. 
    SCMP has a market value of HK$3.04 billion, or $392 million, 
according to Thomson Reuters data. 
 ($1 = 7.7500 Hong Kong dollars) 
 
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BREAKINGVIEWS-Alibaba's HK newspaper deal adds to mission creep  
   urn:newsml:reuters.com:*:nL1N14018U 
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 (Additional reporting by Anne-Marie Roantree in Hong Kong and 
Anya George Tharakan in Bengaluru; Editing by Mike 
Collett-White) 
 ((anyageorge.tharakan@thomsonreuters.com; within U.S. 
+1-646-223-8780; outside U.S. +91 80 6749 7118;; Reuters 
Messaging: Reuters Messaging: 
anyageorge.tharakan.thomsonreuters.com@reuters.net)) 
 
Keywords: SCMP GROUP M&A/ALIBABA