MILAN (AFP) - Silvio Berlusconi agreed Friday (Aug 5) to sell AC Milan to Chinese investors under a deal set to end his trophy-laden three decades in charge of the Italian giants by the end of this year.
Fininvest, the Berlusconi family's private holding company, announced that after months of negotiations a preliminary agreement had been signed between the media tycoon and the prospective buyers.
The deal values Milan, which has some €220 million (S$328 million) of debt, at €740 million, and will lead to a badly-needed cash injection of €350 million over three seasons, Fininvest said in a statement.
A total of €100 million of the sale price is to be paid on completion, which is scheduled to happen by the end of this year.
Chinese and Italian authorities will have to rubberstamp the deal but this is not expected to raise any significant obstacles.
The preliminary accord was signed by Danilo Pellegrino, the Fininvest chief executive, and Han Li, a representative of the Chinese investors.
"Throughout the negotiations Fininvest has maintained its position established by Mr Berlusconi to provide AC Milan with a structure from which it can compete with the world's top clubs," Pellegrino said.
The group has been named as Sino-Europe Sports Investment Management Changxing, and includes businessman Yonghong Li, the Haixia Capital Capital group and other private and public Chinese companies.
The buyers paid €15 million immediately to secure the deal and are due to pay a further €85 million as a deposit within 35 days.
The projected injections of funds will be a welcome boost for a club that remains one of the strongest brands in European football but no longer delivers the results to justify that status.
The cash-strapped club struggled to a seventh-placed finish in Serie A last season and last won a domestic title in 2011.
Seven times champions of Europe (five of those triumphs came under Berlusconi), the Rossoneri lifted their last Champions League trophy in 2007.
Since then their fortunes have dwindled in parallel with those of the former prime minister, who was barred from political life after his 2013 conviction for tax fraud.
Berlusconi turns 80 in September, has recently had open heart surgery and has been seeking to offload part or all of his stake in Milan for over two years.
Even before that he had been scaling back his financial commitment to the club he acquired in 1986, with serious implications for its ability to compete at the highest level.
Andrea Pirlo was released to go after the last domestic title was secured in 2011 because the president would not sanction any more than a one-year contract extension for the Italy playmaker, who was to go on to help Juventus become the dominant force in Serie A.
Zlatan Ibrahamovic and Thiago Silva departed for Paris Saint-Germain a year later.
It was all a far cry from the money-no-obstacle approach Berlusconi took to assembling squads during Milan's glory days.
The late 1980s Milan built around the Dutch trio of Ruud Gullit, Frank Rijkaard and Marco van Basten and the Dejan Savicevic-inspired generation that hammered Barcelona 4-0 in the 1994 Champions League are ranked among the finest club squads in history.
Friday's deal follows hot on the heels of Milan's city rivals Inter Milan being bought out by the Chinese investment group Suning in June.
Earlier on Friday, owners of Premier League outfit West Bromwich Albion agreed to sell the club to Chinese investment group Yunyi Guokai (Shanghai) Sports Development Ltd.
Chinese companies have also acquired stakes in Manchester City, Atletico Madrid and Slavia Prague, as well as buying second-tier English clubs Aston Villa and Wolverhampton Wanderers.
The Milan deal also comes against a backdrop of deepening ties between China and Italy. Prime Minister Matteo Renzi has made increased trade and investment links with Beijing one of his top priorities and the numbers of Chinese visitors to Italy have surged on the back of last year's World Expo in Milan.