Ten months after agreeing to purchase some assets from Focus Media (NSDQ: FMCN), including the company’s digital out-of-home ad network, for $1 billion, Chinese portal SINA says it’s calling off the deal, which hadn’t gotten the go ahead from Chinese authorities. “The delayed consummation of the transaction has negatively impacted the business operations of both sides. Consequently, after due consideration, we have decided with Focus’ management that the best course of action from here is allow the current agreement deadline to expire,” said SINA CEO Charles Chao in a statement.
There had been speculation earlier this summer that the deal was falling apart. Key executives had left Focus Media, and the value of the Focus Media assets had fallen sharply because of the weak advertising market.
The NYT, though, suggests in a report that it was delays on the part of Chinese regulatory officials that ultimately doomed the deal, with the Chinese government not responding to the companies’ requests for approval. Both companies say in separate statements that they will continue to cooperate strategically.
Update: Along with the the cancellation of the Focus deal, Sina (NSDQ: SINA) has also announced raising $180 million in PE funding, from New-Wave Investment Holding Company Limited, a British Virgin Islands company established and controlled by Charles Chao, SINA’s CEO, and other members of SINA’s management.