Universal to unveil China park deal on Saturday
By Erin Prelypchan
12/06/02 03:32 ET
SHANGHAI (Reuters) -- French entertainment giant Vivendi Universal SA will sign an agreement on Saturday to build a theme park in the booming Chinese city of Shanghai, the local government said on Friday.
The deal will give Universal a leg up against Disney in selling big-ticket entertainment in one of the world's fastest growing economies and cement Shanghai's ambition to become a global metropolis and regional tourism centre.
Universal, which runs parks in Japan and the United States, will roll out its tried-and-true formula of rides inspired by Hollywood films like "Jaws" and "Jurassic Park," hoping to lure a growing middle-class and grab a slice of rising Chinese incomes.
"Universal Recreation Group has reached an agreement in principle to build the Shanghai Universal Studios Theme Park, China's first world-class theme park, in Pudong," the Shanghai government said in a statement seen by Reuters on Friday.
Eastern Shanghai's Pudong district is already home to the world's first high-speed magnetic levitation train, slated to open in 2004, and the site of the World Expo 2010, which the city won the right to host this week.
City government spokesmen gave no further details of the Universal deal, but said more would be revealed at a news conference on Saturday.
Friday's announcement follows a contract Universal signed in November with two Chinese partners -- municipally owned Waigaoqiao Group Co and Shanghai Jinjiang (Group) Holding Co -- with an eye to setting up a joint venture.
Last month a Beijing-based tourist group said China's capital city also planned to build a Universal Studios park in time for the 2008 Summer Olympics, with an initial cost of $900 million.
A Universal spokesman in Los Angeles was not immediately available for comment.
ONE UP ON DISNEY?
Hotel and tourism group Jinjiang's spokesman denied knowledge of the deal, while Waigaoqiao -- a property and trade firm based in Pudong -- could not be reached.
Universal would be stealing a march on the Walt Disney Co, which has said it could build a similar park in China.
Disney is already building a park in Hong Kong due to open in 2005 or 2006 and has neither confirmed nor denied frequent reports it has signed a letter of intent for a Shanghai park.
The city's attractiveness as a theme park site is evident, however, with economic growth of 10.2 percent last year and projections of nine to 10 percent expansion this year.
Shanghai is already China's richest city by per-capita GDP, and home to the country's largest urban population, with 13 million people in the downtown core alone.
A Universal Park also boosts Shanghai's plans to become a showcase tourist destination, with projects like a Formula One Grand Prix race track to be ready in 2004 and the world's highest Ferris wheel slated to grace the downtown skyline.
The Asian Wall Street Journal reported on Friday the Universal deal could be worth $870 million and the park could open in 2006. Chinese partners would own a majority stake in the park, it quoted a Waigaoqiao official as saying.
Universal's investment is likely to be less than $100 million, although it probably would end up with an ownership stake of approximately one-third, the Journal added.
By Erin Prelypchan
12/06/02 03:32 ET
SHANGHAI (Reuters) -- French entertainment giant Vivendi Universal SA will sign an agreement on Saturday to build a theme park in the booming Chinese city of Shanghai, the local government said on Friday.
The deal will give Universal a leg up against Disney in selling big-ticket entertainment in one of the world's fastest growing economies and cement Shanghai's ambition to become a global metropolis and regional tourism centre.
Universal, which runs parks in Japan and the United States, will roll out its tried-and-true formula of rides inspired by Hollywood films like "Jaws" and "Jurassic Park," hoping to lure a growing middle-class and grab a slice of rising Chinese incomes.
"Universal Recreation Group has reached an agreement in principle to build the Shanghai Universal Studios Theme Park, China's first world-class theme park, in Pudong," the Shanghai government said in a statement seen by Reuters on Friday.
Eastern Shanghai's Pudong district is already home to the world's first high-speed magnetic levitation train, slated to open in 2004, and the site of the World Expo 2010, which the city won the right to host this week.
City government spokesmen gave no further details of the Universal deal, but said more would be revealed at a news conference on Saturday.
Friday's announcement follows a contract Universal signed in November with two Chinese partners -- municipally owned Waigaoqiao Group Co and Shanghai Jinjiang (Group) Holding Co -- with an eye to setting up a joint venture.
Last month a Beijing-based tourist group said China's capital city also planned to build a Universal Studios park in time for the 2008 Summer Olympics, with an initial cost of $900 million.
A Universal spokesman in Los Angeles was not immediately available for comment.
ONE UP ON DISNEY?
Hotel and tourism group Jinjiang's spokesman denied knowledge of the deal, while Waigaoqiao -- a property and trade firm based in Pudong -- could not be reached.
Universal would be stealing a march on the Walt Disney Co, which has said it could build a similar park in China.
Disney is already building a park in Hong Kong due to open in 2005 or 2006 and has neither confirmed nor denied frequent reports it has signed a letter of intent for a Shanghai park.
The city's attractiveness as a theme park site is evident, however, with economic growth of 10.2 percent last year and projections of nine to 10 percent expansion this year.
Shanghai is already China's richest city by per-capita GDP, and home to the country's largest urban population, with 13 million people in the downtown core alone.
A Universal Park also boosts Shanghai's plans to become a showcase tourist destination, with projects like a Formula One Grand Prix race track to be ready in 2004 and the world's highest Ferris wheel slated to grace the downtown skyline.
The Asian Wall Street Journal reported on Friday the Universal deal could be worth $870 million and the park could open in 2006. Chinese partners would own a majority stake in the park, it quoted a Waigaoqiao official as saying.
Universal's investment is likely to be less than $100 million, although it probably would end up with an ownership stake of approximately one-third, the Journal added.