Manchester City owners City Football Group (CFG) have entered a merger agreement with China Media Capital (CMC).

The deal sees CMC take a 13% stake in CFG for $400m. CFG, which also owns New York City FC, Melbourne City FC, and a minority shareholder in Yokohama F. Marinos, is now valued at $3bn.

The announcement follows more than six months of discussions between the parties to find the optimum model and associated strategies for the partnership. 

The capital from the share acquisition will be used by City Football Group to fund its China growth, further CFG international business expansion opportunities and further develop CFG infrastructure assets.

The deal will see new shares issued in City Football Group in addition to the ones held by the Abu Dhabi United Group (ADUG), the investment and development company privately owned by Sheikh Mansour bin Zayed Al Nahyan – prior to this transaction the sole shareholder of City Football Group.

>See also: M&A in the sporting world

Manchester City Football Club chairman Khaldoon Al Mubarak highlighted football’s global appeal and added that in China “the exponential growth pathway for the game is both unique and hugely exciting”.

“Our partners have an incredible track record of creating value and could not be better placed to help us further evolve City Football Group,” he continued.

“Our belief is that we now have an unrivalled platform to grow CFG, our clubs and companies both in China and internationally and we will be working hard with our new partners to realise the potential that this deal creates.”

CMC chairman Ruigang Li added that “football is now at a fascinating and critical stage of development in China”.

“We see unprecedented growth opportunities in both its development as an industry, being China’s most watched sport, and its inspirational role bringing people of all ages together with a shared passion,” he continued. “CMC has long been dedicated to creating opportunities that facilitate positive developments in Chinese football from different aspects within the ecosystem.”

Further reading: Outbound M&A activity from Asia