Elliott Management has agreed to sell Italy’s AC Milan football club to U.S. investment group RedBird Capital for 1.2 billion euros, closing a four-year foray into the sports business, people close to the club said.
The AC Milan deal, to be announced on Wednesday, will see Elliott’s ownership secure the title of Italy’s top professional league this season, the people added.
RedBird’s acquisition, led by former Goldman Sachs banker Gerry Cardinale, comes less than a year after it acquired about 10% of the shares Fenway Sports Group owns the holding companies of Liverpool Football Club and professional baseball Boston Red Sox.
For Cardinale, the deal would be his most high-profile acquisition in sport and would allow his company to own a seven-time European champions club.
Under the terms of the deal, Elliott will retain a minority stake in AC Milan and possibly a board seat, people close to the club said. The sale came in a months-long process in which Elliott scoured several buyers, Including Investcorp in Bahrain.
The deal underscores the forays of powerful private equity investors into sports and football in particular, just days after a largely California-based US consortium funded clear lake capital agree £2.5 billion paid Plus a commitment to invest £1.75bn in the acquisition of England’s Chelsea Football Club.
It also marks another example of the influx of American investors into Italian football clubs, with Atalanta, ACF Fiorentina, CFC Genoa, AS Roma, Spezia Calcio, Parma Calcio and Venezia FC all having American owners or investors.
Lee bought AC Milan in 2017 from former Italian prime minister and media mogul Silvio Berlusconi, who owned the club for decades and received a high-interest loan of more than 300 million euros from Elliott .
After taking control of Milan, Elliott, who manages $52 billion in assets and is known for his fierce activism against public companies, set out to rebuild the club, in part to keep costs at sustainable levels. It does this by recruiting young footballers who typically join teams at lower transfer fees and wages and have grown to command higher valuations.
Elliott has spent most of his ownership trying to win government approval to replace the San Siro with a new stadium, where it shares a home with rivals Inter Milan. Its investments are managed by Gordon Singer, son of firm founder Paul Singer, and portfolio manager George Flaney.
RedBird plans to keep much of the management team Elliott built, including AC Milan captain-turned-technical director Paolo Maldini, as it looks to build on the hedge fund group’s recent success.