SMG merges subsidiaries to form internet giant

Shanghai Media Group (SMG) is merging two subsidiaries – BesTV and Shanghai Oriental Pearl – to form what it claims will be China’s largest online media conglomerate.

BesTV, an internet company partnered with Microsoft, and broadcaster Shanghai Oriental Pearl are both currently listed on the Shanghai Stock Exchange.

SMG will have a 45% stake in the merged company, which will be called Shanghai Oriental Pearl New Media Co, according to a filing with the Shanghai Stock Exchange. BesTV plans to raise up to $1.63bn through a private placement of stock to acquire some other SMG assets.

SMG chairman Li Ruigang told Chinese press that, following the merger, the company will increase its investments in digital channels and content production, and is also interested in overseas expansion, including the launch of a fund in Silicon Valley.