Wang Jianlin, once China’s richest man, had some grand plans for the entertainment and tourism ventures of Dalian Wanda Group.
Just a year ago, the Chinese billionaire was boasting the vastness of his empire, challenging no less than Disney in a bid for theme park dominance in China. Wang then claimed that his theme parks were a “pack of wolves” that would soon devour the lone “tiger” of Disney’s $5.5 billion Shanghai Disneyland.
He has also gone off to a Hollywood shopping spree last year, purchasing one studio after another to pursue his plans of dominating the international filmmaking scene.
Recent reports, however, apparently signal Wang’s retreat, with his recent announcement that the group would be divesting around $9.3 billion in tourism assets. Although according to the Wall Street Journal, the company is, in fact, actually selling off $13 billion in assets.
The deal involves the sale of 76 hotels and a major chunk of 13 tourism projects to property developer Sunac China.
It appears that Wang is also giving up his equally ambitious Hollywood plans as the deal included the sale of Wang’s Qingdao Movie Metropolis, reports Shanghaiist. Wang had once touted the complex as China’s alternative to Hollywood.
He was eyeing a $7.3 billion project back in 2013 that involved building a complex that would house multiple film studios, hotels, and an outdoor theme park. His plans did not play out as well as he hoped with analysts blaming poor management as the cause of its subsequent collapse.
As for Wang’s recent move, his only explanation was to “reduce debt” and adopt an “asset-light” business model.
Many observers, who find the apparent urgency of the deal rather suspicious, remain skeptical of the stated excuse. Industry analysts further noted that the tycoon has never given any previous indication that he might be leaning towards such a direction.
For some, what is becoming apparent is that Wanda’s woes might also have been brought about by the current political climate in China. While Beijing has encouraged aggressive global expansions the previous years, such business behavior is now frowned upon as the Chinese government shifts its policies on overseas investments.
Interestingly, Wang would later make such claim as well in a recent interview with Caixin. He explained that following the controversial sale, Dalian Wanda Group will now switch its investment focus to domestic markets.
Wanda will “actively respond to the state’s call and decided to put its main investments within China,” Wang was quoted as saying.
He also reiterated in the interview how the sale of assets will allow Wanda to pay off debt and generate greater investment returns.