Alibaba, Under Beijing Pressure, Moves to Sell Stake in State-Owned Broadcaster Earlier this year, government officials told the company to come up with a plan to substantially cut back on its media holdings

Alibaba Group Holding Ltd. plans to dispose of its minority ownership in a state-owned broadcaster, the first concrete step the Chinese internet giant is taking to dismantle its sprawling media empire following pressure from Beijing.

Mango Excellent Media, a subsidiary of the government-run Hunan TV, said in a stock exchange filing on Friday that Alibaba plans to sell its entire 5% stake in the Shenzhen-listed company less than a year after buying it. It didn’t provide a reason for the proposed sale. Alibaba declined to comment.

In March, The Wall Street Journal reported that China’s government had asked Alibaba to shed its media assets, as officials grew concerned about the e-commerce behemoth’s sway over public opinion in the country.

Earlier this year, government officials reviewed a list of Alibaba’s media assets and instructed the company to come up with a plan to substantially curtail its media holdings, the Journal reported.

Mango, which runs a popular namesake video-streaming service, is among Alibaba’s largest state-owned media assets.

The company is controlled by Hunan TV, the official broadcaster in south-central China’s Hunan province. Hunan TV, which is also known as Mango TV, is the most-watched network nationwide after China Central Television, thanks to its hit variety shows and soap operas.

Alibaba, via an investment vehicle, bought more than 93 million shares of Mango in December 2020 for 6.2 billion yuan, equivalent to $959 million, according to a stock exchange filing. Alibaba agreed at the time not to sell any Mango shares for at least 12 months.

The deal, which received the blessing of Hunan’s government, made Alibaba the second-largest shareholder of Mango after the provincial broadcaster, the filing showed. In August, Mango did a private share placement that increased the stake of an investment firm affiliated with state-owned telecom carrier China Mobile Ltd. to 7%, bumping Alibaba into third place.

On Friday, Mango said its board agreed to waive the lockup period and will submit the waiver for shareholder approval.

Alibaba’s stake in Mango was worth about $599 million based on the stock’s Thursday’s closing price, 38% less than what it originally paid. Mango’s shares jumped 6.9% on Friday after the company disclosed Alibaba’s plan to sell out.

Alibaba’s own shares have tumbled over the past 12 months to multiyear lows, after Chinese regulators amped up scrutiny of its business practices and imposed a record antitrust fine on the company in April.

In March, Alibaba said in a statement to the Journal that it is a passive financial investor in its media assets. The Hangzhou-based group said it wasn’t involved in editorial decisions and the purpose of investments was to provide the media companies with technology support and “drive commercial synergies with our core commerce businesses.”

Alibaba also owns substantial stakes in Yicai Media Group, one of China’s most influential business news outlets, and Weibo, a popular Twitter-like platform. It also owns Hong Kong’s South China Morning Post newspaper.

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