Chinese billionaire backs $2b Cirque du Soleil takeover

Cirque du Soleil has played to almost 160 million spectators worldwide since it was founded in 1984. Photo / Jennifer S. Altman

A Chinese billionaire known as the Warren Buffett of the East has backed the US$1.5 billion ($1.95 billion) takeover of Cirque du Soleil - the circus entertainment company known for its acrobatic spectacles.

Guo Guangchang, who heads the conglomerate Fosun, will become a minority shareholder in a deal led by United States private equity firm TPG.

Canada's second-largest pension fund, Caisse de depot et placement du Quebec, will also take a minority stake.

Cirque founder Guy Laliberte will maintain a holding in the Montreal-based company, which has played host to almost 160 million spectators in more than 330 cities and 48 countries since it was founded in 1984.

Laliberte will also continue to provide strategic and creative input.

It is the latest high-profile deal for Guo who, having turned Fosun into one of China's largest firms, now wants to expand across the globe.

Founded by Guo in 1992 with three fellow graduates of China's Fudan University in Shanghai and just US$4000, Fosun is a sprawling conglomerate-cum-investment house with interests spanning pharmaceuticals, mining, property and financial services, including insurance and asset management, and annual revenue of 51 billion yuan ($10.7 billion).

In his Chinese homeland, Guo is known as the Warren Buffett of the East, because he says his investment philosophy is modelled on the legendary American.

Guo has been steadily expanding abroad for the past few years but in recent months has become notably more active. In January, Fosun was propelled on to the international stage with a US$1.3 billion takeover of Club Med, a French institution and pioneer of all-inclusive holidays. Two months later, Guo snapped up a stake in British tour operator Thomas Cook.

Fosun is also among a field of five or six investors jostling to buy Center Parcs, the holiday resorts operator.

It is on the hunt for companies and brands that are either already popular in China and can be expanded further or are likely to resonate with Chinese people. Club Med has three resorts in China.

"We have an objective to become one of the global leaders in businesses driven by lifestyle needs, which are quickly taking root in China," Guo said.

The new owners of Cirque du Soleil, which has suffered from falling profits in recent years, plan to expand Cirque's presence in the Chinese market.

"After 30 years building the Cirque du Soleil brand, we have now found the right partners in TPG, Fosun and the Caisse to take Cirque du Soleil forward to the next stage in its evolution as a company founded on the conviction that the arts and business, together, can contribute to making a better world," Laliberte said.

TPG partner David Trujillo said: "We are excited about the opportunity to bring our global platform of resources and know-how to propel the growth of Cirque's unique brand, content and capabilities."

The buyers have agreed to terms that will ensure Montreal - home of about 1400 employees - remains Cirque's international creative and management headquarters.

The sale is expected to close in the third quarter.