http://www.hollywoodreporter.com/ne...s-theme-park-business-93-billion-deal-1019589
China's Wanda Retreats From Theme Parks Business With $9.3 Billion Deal
11:53 PM PDT 7/9/2017 by Patrick Brzeski
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Wang Jianlin
Just last year, the company's billionaire chairman Wang Jianlin boasted that his "wolf pack" of theme parks would drive the Walt Disney Co. out of China.
Dalian Wanda Group, led by Chinese billionaire Wang Jianlin, says it has reached a landmark deal to sell its theme parks business to Sunac China for $9.3 billion.
The agreement — which is said to be the second-biggest real estate deal ever in China — signals a major deescalation of Wanda's once mighty ambitions in the theme park sector. Last year, Wang announced plans to build at least 20 major cultural projects including theme parks across the Middle Kingdom. At the time, he boasted that his "wolf pack" of parks would drive the Walt Disney Co.'s "lone tiger" — Shanghai Disneyland — out of China.
Under the terms of the deal with Sunac, Wanda is selling a 91 percent stake in nearly all of its current and planned tourism projects, including three recently launched theme parks, and 72 of its 102 hotels in China.
The deal is believed to be part of Wanda's drive to cut its massive debt load and bolster its case with Beijing regulators for an IPO. The conglomerate pulled its core property unit off of the Hong Kong stock exchange last year, with plans to relist in mainland China, where valuations are among the world's highest.
Wanda said Sunac will take over responsibility for the tourism projects' loans and financing, while Wanda will continue to design, build and manage the resorts under its own brand name.
Wanda did not officially state a reason for the sale, but in an interview with Chinese business outlet
Caixin, Wang said the deal would substantially reduce Wanda's debt and move the company closer to the "asset-light" model he has been
publicly espousing and pursuing for some time.
"Through this asset transfer, Wanda Commercial's debt ratio will be greatly reduced, all the proceeds will be used to repay loans. Wanda Commercial plans to repay most of the bank loans this year," Wang told Caixin.
Best known in China as a real estate developer, Wanda began building theme parks just a few years ago as part of an aggressive diversification into what it calls the "culture industry," comprising the entertainment, sports and tourism sectors. Believing that the high-growth era for China's real estate sector is in its twilight, Wang has tried to pivot his conglomerate to capitalize on the Chinese government's efforts to transition the country to a consumer-led economy. The move has entailed acquiring domestic and international cinema chains — such as North America's largest, AMC Entertainment — and overseas sports and leisure assets, such as British yacht-maker Sunseeker, the company behind the Iron Man triathlon races, and U.S. movie studio Legendary Entertainment.
The deal with Sunac could be viewed as a tacit admission of how much Wanda has struggled to devise a winning formula in the complex theme parks business. The company's first major attraction, Wanda Movie Park Wuhan, opened in central China in late 2014 and closed within months after early admission numbers plummeted. Wanda said the park was closing temporarily for upgrades, but it has yet to reopen. The company's major theme park development in Nanchang — which Wang talked up on television last year while publicly dismissing Disney's theme park ambitions in China — reported attendance of approximately 1.3 million in its first seven months. Shanghai Disneyland, meanwhile, hit 11 million visitors in its first full year.
Sunac is one of China's largest real estate developers, based in the Eastern Chinese city of Tianjin. The company is led by Sun Hongbin, whose net worth
Forbesestimates to be $2 billion. Sunac has become an increasingly visible dealmaker. Earlier this year, it threw a lifeline to Beijing-based LeEco Holdings, investing $2.2 billion in the troubled tech and entertainment company.
Wanda says the $9.3 billion parks deal with Sunac will be finalized in a signed agreement later this month.
