China’s Dalian Wanda Group has agreed to a deal with Sunac China Holdings to sell its Wanda Cultural Management unit, representing the last of Wanda’s film and theme park ties in the country. The deal all but signals the end of Wanda’s once-massive plans for its entertainment businesses in China.
Sumac said in a regulatory filing it has acquired the Wanda arm for about RMB 6.281 billion ($907 million), finishing off its original July 2017 purchase of Wanda’s 76 hotels and most of its 13 tourism projects in a deal worth $9.3 billion, thought to be the Middle Kingdom’s second-largest property pact ever.
Sunac will now also have full control of former Wanda assets including shops, hotels, film and TV industry parks, yacht club, ocean parks, theaters and bar streets. Also noted in the regulatory filing: Sunac has a right to change the Wanda trade name at any time.
Notably, the assets include Wanda’s theme parks, which CEO Wang Jianlin proclaimed in 2016 would be a “wolf pack” compared to Disney’s lone “tiger.” Also, the massive, $8.2 billion Qingdao Oriental Movie Metropolis, a jewel of Wanda’s entertainment ambitions. The 1,200-plus acre site includes a film studio and theme park, a 4,000-room resort/hotel, a shopping mall, an entertainment center, condos, a conference center, a yacht club, a hospital and a celebrity wax museum.
Wang has been pursuing an asset-light strategy for Wanda with a focus on reducing corporate debt, resulting in a pullback outside China and the selling off of billions in holdings during the past several months. In February, it sold a 12.77% stake in its film unit to an affiliate of Alibaba Group and the state-owned Cultural Investment Holdings Co.
The news of the sale today comes as Wanda has denied reports last week that it is mulling selling a stake in Legendary Entertainment, the Hollywood studio it acquired in 2016 for $3.5 billion. It called the reports, which suggested its sports assets were also on the block, “seriously inconsistent with the facts.”
Wanda also owns theater chain AMC Entertainment after a $2.6 billion acquisition in 2012. In September, AMC said it closed a $600 million strategic investment from Silver Lake and will use part of the proceeds to buy back Wanda’s Class B common shares owned by Dalian Wanda. The transaction was seen as a a retreat from the U.S. movie theater business for the Chinese conglomerate.
In June at CineEurope, AMC boss Adam Aron sought to quell rumors of a Wanda pullback, insisting that they had “not sold a single share in eight years,” though he conceded, “things are status quo until they are not.”