The China’s biggest Alibaba Group has announced its acquisition of South China Morning Post, Hong Kong’s one among the most influential English language newspapers and other media assets of SCMP Group Ltd for a deal worth to be $266 million.
This acquisition deal of Alibaba consists of licences for other Hong Kong media that includes Elle, Cosmopolitan and Harper’s Bazaar. Issues have been raised that China is tightening its grip on Hong Kong and fears that editorial independence will be compromised.
As Hong Kong’s leading English newspaper, the South China Morning Post reports on issues and sensitive news of mainland China, where many websites of several international media are blocked from reporting. “I think it will be interesting to see if the existing reporters and editorial staff would like to continue to stay. It’s worth watching,” said James Sung, a political analyst at City University of Hong Kong. However, Alibaba has denied it saying, “In fact, we think the world needs a plurality of views when it comes to China coverage. China’s rise as an economic power and its importance to world stability is too important for there to be singular thesis,” said Joseph C.Tsai, executive vice chairman of the Alibaba Group.
The English newspaper company was previously owned and operated by the Malaysian tycoon Robert Kuok who had close ties to the Chinese Government. In the letter to readers Tsai of Alibaba has said it plans to integrate its technology with the “deep heritage” of the South China Morning Post. He stated, ” We see a compelling business case for the acquisition because we believe that Alibaba is best positioned to take the SCMP to the next level. The foundation for this work must be the quality of the content. And what underpins this will be editorial excellence: a clear pre-requisite to maintaining readers’ trust and, ultimately, achieving commercial success. Be assured, we get that.”
The newspaper group is said to expect a record gain of around HK$1.4 billion from the asset sale. It plans to use the amount received from the all cash sale for the payment of a special cash dividend.
The acquisition is an ambitious move that sees Alibaba taking a significant stake in print journalism , as a means to boost its digital potential. It has acquired or invested in various media and content companies in recent years. In June, the company agreed to pay $194 million for an undisclosed stake in domestic financial media from China Business News.