Alibaba Agrees to Purchase Hong Kong’s South China Morning Post

2015 Bloomberg News
Bloomberg News

(Bloomberg) — Alibaba Group Holding Ltd., the e-commerce giant headed by billionaire Jack Ma, agreed to buy Hong Kongs South China Morning Post and other affiliated media assetsas the Internet tycoon follows in the footsteps ofJeff Bezos in pursuing the revival of a century-old newspaper.

The purchase includes the flagship newspaper and other related businesses including magazine and recruitment, SCMP Group Ltd. said in a statement. Financial terms werent disclosed.

The SCMP, once the envy of the industry in terms of profitability, has in recent years joined other mastheads in struggling to attract advertisers amid the rise of free publications online. Control of the citys premier English- language broadsheet has been unchanged sincemedia magnate Rupert Murdoch sold most of his stake to Malaysian billionaire Robert Kuok in 1993.

Jack Ma is such an innovative and visionary figure that the future of the South China Morning Post under his control may actually be somewhat brighter, said Peter Schloss, managing partner of CastleHill Partners LLC, a Beijing-based advisory and investment company. Robert Kuok has lost interest in it. Jack would come in and invigorate the move it firmly in the digital space.

For Alibaba, the purchase of the publication would raise the profile of its growing media empire. In June, Alibaba announced the purchase of a stake in one of Chinas most influential business media companies and months later, helped set up a media and entertainment company called CMC Holdings.

Media Empire

Its not just news. InNovember, Alibaba agreed to buy video service Youku Tudou Inc. to stream more content to Chinese Internet users through control of the YouTube-like site, and also invested in Paramount Pictures latest Mission Impossible” movie through itsAlibaba Pictures Group unit.

Alibabas Ma also follows Inc.s Bezos — who bought the Washington Post in 2013 — among Internet tycoons snapping up storied brands at a time printed media struggles to compete with Web-based competitors for advertising. Chris Hughes, one of the co-founders of Facebook Inc., bought a majority stake in the New Republic magazine in 2012. Axel Springer SE, the German media company led by Mathias Doepfner, bid for the Financial Times earlier this year, which was sold to Japans Nikkei Inc. for $1.3 billion.

Back at the SCMP, the sale gives the112-year-old newspaper an owner armed with more than 100 billion yuan ($15.5 billion) in cash and investments. SCMP Group, the papers listed parent, has seen three years of profit declines and had it not been for some extraordinary gains, its latest semiannual profit would have plunged more than 40 percent.

Alibaba is taking on the media business, which includes the newspaper and magazine publishing operations that generate more than 90 percent of the SCMP Groups revenue and about 65 percent of adjusted operating profits. Besides newspapers and magazines, the SCMP also has a business segment that leases out various real estate properties.

Still, given the newspapers influence, the deal may have implications beyond just profits and sales.

Jack Ma would view an acquisition of the South China Morning Post as a national service, Schloss said. Hed be doing the central government a favor by ensuring that the South China Morning Post is in friendly hands.

SCMP Group has been suspended from trading since February 2013 after the company failed to have at least 25 percent of shares held by minority investors, the minimum proportion required for a company to trade its shares in Hong Kong.

–With assistance from Shai Oster.

To contact Bloomberg News staff for this story: Steven Yang in Beijing at; Keith Zhai in Beijing at; Lulu Yilun Chen in Hong Kong at To contact the editors responsible for this story: Michael Tighe at Young-Sam Cho, Kim McLaughlin



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