LONDON (Reuters) - Chinese investors are paying $400 million (£265 million) for a stake in the group that owns football clubs including England's Manchester City and New York City FC, the country's most significant overseas investment in the game.
The consortium is led by China Media Capital (CMC) Holdings and CITIC Capital and will take a stake of more than 13 percent in City Football Group. The deal values the Abu Dhabi-owned City Football Group at $3 billion, it said on Tuesday.
The new investors will seek to expand the sport in China, where President Xi Jinping is an avid fan who wants to host the World Cup one day and make the underperforming national team more competitive.
Xi visited a state-of-the-art academy which the City Football Group has set up for young players in Manchester during a visit to Britain in late October.
The deal involves the issue of new shares in City Football Group in addition to those owned by Sheikh Mansour's Abu Dhabi United Group.
Investment from Sheikh Mansour has transformed the fortunes of Manchester City since 2008, and the club won the English Premier League in 2012 and 2014.
Ruigang Li, chairman of state-backed media company CMC, will join the board of the City Football Group.
"Football is now at a fascinating and critical stage of development in China," he said in a statement.
"We see unprecedented growth opportunities in both its development as an industry, being China's most watched sport."
CMC already owns a slate of sports media rights, including for Chinese Super League football in a deal reportedly worth more than $1 billion and the national teams.
The capital from the share acquisition will be used by City Football Group to fund its China growth, further international business expansion opportunities and on infrastructure.
The Chinese investment is the latest foreign backing for a club in English football's lucrative Premier League.
City's local rivals Manchester United are controlled by the American Glazer family and also have a valuation of around $3 billion. Arsenal and Liverpool are also owned by Americans, while Russian Roman Abramovich is Chelsea owner.
The deal shows interest in football as an investment, as the value of television rights soars, but was also strongly motivated by the desire to raise playing standards in China.
"It's about creating a Chinese infrastructure for football and acquiring competencies," said Simon Chadwick, professor of sports enterprise at Salford University in northern England.
"I don't think this is just a random purchase," he added, highlighting City's investment in the academy in Manchester to help nurture young players.
Chinese investors have shown increasing interest in European football. Property group Dalian Wanda this year bought a 20 percent stake in Spanish club Atletico Madrid.
Seeking to increase its income after heavy investment in Manchester City, the club's owners have built up a network of linked clubs around the world.
City Football Group now also includes New York City FC, Melbourne City FC and a stake in Japan's Yokohama F. Marinos.
(Additional reporting by Engen Tham; editing by Jason Neely, Ossian Shine and Mike Collett-White)
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