Chinese companies are showing more ambition to reach into the international market, especially in the rapidly evolving technology sector, with a major acquisition announced on Thursday.
A Chinese consortium made up of China Oceanwide Holdings Group Co Ltd and IDG Capital announced that they have entered into a definitive agreement to acquire International Data Group (IDG). With operations in 97 countries worldwide, Boston-headquartered IDG is a leading global media, market research and venture company engaging in the most influential technology ventures and buyers. According to Forbes, its 2015 sales revenue was estimated at $3.8 billion. It was the first US publisher to enter the Chinese market in 1980 with the launch of China Computerworld.
This acquisition also includes IDG's subsidiaries International Data Corporation (IDC), IDG Communications and IDG Ventures.
With this deal, China Oceanwide will be the controlling shareholder of IDG's operating businesses, including IDC and IDG Communications. IDG Capital will become the controlling shareholder of IDG Venture.
The consortium has received clearance from the Committee on Foreign Investment in the United States for the transaction, which is expected to close within the first quarter of 2017. Although the amount of the transaction is not disclosed, earlier media reports stated that it would amount to over $1 billion.
IDG will continue to be headquartered in Boston and managed by the current team. A new board of directors will be appointed once the transaction is closed.
Walter Boyd, chairman of IDG, said that China Oceanwide and IDG Capital will provide the right financial, strategic and cultural resources to help the group seek further development.
Beijing-based China Oceanwide is a privately-owned company with diverse business operations, including real estate, financial services, media, technology and strategic investment. Lu Zhiqiang, chairman of China Oceanwide, said that IDG is a natural extension for their international portfolio expansion.
"We plan to support IDG's current management team as they implement their business plans, providing them with the autonomy, financial support and commercial resources that can support IDG's growth and expansion and further enhance its leading position in the market," said Lu.
China Oceanwide started to invest overseas to replenish its core real estate business in 2014. It became the controlling shareholder of Hong Kong-listed Hutchison Harbor Ring Limited in November 2014. It also announced the plan to acquire 51 percent stake of full-license brokerage Quam (HK) Limited with HKD$ 109.6 million ($14.1 million) last November. On Tuesday, it announced that its overseas wholly-owned subsidiary has applied for up to $300 million financing from banks to develop its overseas projects.
(Source: China Daily)
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