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Wanda Group heads for $16 billion M&A year to challenge Disney

07/27/2016| 7:13:27 PM|

Chinese Tycoon's shopping spree ranged from Legendary to Odeon for a record year, seeking to transform his Wanda Group into a Disney competitor.

Billionaire Wang Jianlin is headed for a record year of mergers and acquisitions as the Chinese tycoon seeks to build an entertainment empire that could challenge Walt Disney Co. by the end of the decade.

Wang’s AMC Entertainment raised its offer for Carmike Cinemas on Monday, pushing the total amount of purchases completed or announced by the tycoon’s companies to over USD 16 billion this year. That’s more than triple Wang’s M&A total in 2015, according to data compiled by Bloomberg.

Most of the investments are going toward buying entertainment assets to transform Wang’s flagship Dalian Wanda Group into a juggernaut with USD 200 billion in market capitalization and USD 100 billion of annual sales by the end of the decade. 

The idea is that China’s push to shift the economy into a consumption-driven one, coupled with a growing middle class, will be a boon for the leisure industry.

Breaking down Wang’s deals for this year, the Chinese mogul bought Hollywood producer Legendary Entertainment for USD 3.5 billion and is now seeking to inject it and other film-related businesses into his Shenzhen-listed Wanda Cinema Line as part of a USD 5.7 billion reorganization. AMC also agreed to buy Odeon & UCI Cinemas Group for USD 1.2 billion, expanding in Europe and widening Wanda’s lead as the world’s largest operator of movie theaters.

He’s also reportedly in talks to buy a 49% stake in Viacom Inc.’s Paramount Pictures, though Wanda and Viacom representatives have declined to comment on the matter.

The shift toward leisure is also being reflected in Wanda’s financial results. The entertainment business saw sales rise 57% during the first half.

Though entertainment is the growth driver, Wanda’s largest business remains property. Wang’s still making high-profile deals involving real estate after proposing to buy out his Dalian Wanda Commercial Property Co. for USD 4.4 billion in what would be Hong Kong’s biggest privatization deal ever. Wang, who’s seeking to relocate the company’s listing to mainland China to fetch higher valuations, will face a shareholder vote on the deal on Aug. 15.

Beyond M&As, Asia’s second-richest man in the Bloomberg Billionaires Index has also kept busy with other types of deals this year.

He announced a 3-billion-euro (USD 3.3 billion) retail and leisure development project outside of Paris and agreed to spearhead a USD 10 billion industrial park in the northern Indian state of Haryana.

Back home, he agreed to invest 15 billion yuan (USD 2.2 billion) in three hospitals, reorganized his flagship conglomerate to form a financial group and opened the first of his planned 15 Wanda City projects in China to fend off Disney’s theme parks.

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TAGS: Wanda Group | Disneyland | Shanghai | thems parks | M&A
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