Alibaba Strikes $266 Mln Deal To Buy South China Morning Post

Chinese e-commerce giant Alibaba Group Holding Ltd has confirmed a $266 million deal to buy Hong Kong’s English-language newspaper the South China Morning Post (SCMP), Reuters reported.

SCMP Group said that “uncertain” future for traditional publishing is a key reason behind the sale, adding Alibaba would likely be able to "unlock greater value" from the business.

However, the deal has been under attack as some people fear that it will compromise newspaper’s editorial independence.

Alibaba's Executive vice-chairman Joseph Tsai addressed the criticism in an open letter to SCMP readers: "Some have suggested that ownership by Alibaba will compromise the SCMP's editorial independence. This criticism reflects a bias of its own, as if to say newspaper owners must espouse certain views, while those that hold opposing views are 'unfit.' In fact, that is exactly why 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 a singular thesis."

"In reporting the news, the SCMP will be objective, accurate and fair. This means having the courage to go against conventional wisdom, and taking care to verify stories, check sources and seek all viewpoints. These day-to-day editorial decisions will be driven by editors in the newsroom, not in the corporate boardroom."

The deal will generate a one-off gain of HK$1.42 billion to SCMP and it plans to use the proceeds to distribute a special cash dividend to its shareholders, SCMP said on Monday. Besides SCMP, assets at stake include the Sunday Morning Post, magazines and related print and digital publications, recruitment, outdoor media, events and conferences, education and digital media businesses, according to SCMP.

SCMP CEO Robin Hu said Alibaba’s “proven expertise especially in mobile Internet” placed the company “in an excellent position to leverage technology to create content more efficiently and reach a global audience. We welcome Alibaba’s commitment to invest additional resources in its editorial and business operations to make the SCMP even stronger”.