Walt Disney Co. signed a contract today with state-owned Shanghai Shendi Group Co. to build its first mainland China theme park, less than a week after the World Expo drew a record number of visitors.
The signing is “another step forward” in Disney’s goal to open its fourth theme park outside the U.S. after being in talks with the Shanghai city government “for quite some time,” the Burbank, California-based company said in an e-mailed statement today.
Disney won government approval for a theme park last year. It still needs approval for the venture from “relevant government departments,” the municipal government said in a statement on its website today. Shendi will work with the world’s biggest theme-park operator to construct and operate the park, according to another government statement.
“This is a sign that restrictions on construction projects have been lifted after the Shanghai World Expo and work on the Disney park will speed up,” Zhang Chifei, a Nanjing-based analyst at Huatai Securities Co., said in a phone interview.
The project may cost 25 billion yuan ($3.8 billion), state-controlled Xinhua News Agency said today. The park, to be in Shanghai’s Pudong district, will have a Magic Kingdom theme with some elements reflecting regional flavor, Disney said last November. Disney opened a park in Hong Kong in 2005.
Neither Disney nor the government divulged more details about the arrangement with Shendi.
The six-month Expo attracted 73.1 million visitors, topping the record of 64 million set in Osaka, Japan, in 1970. It was part of an investment campaign in the city of 19.2 million people that China aims to develop into a global financial center by 2020. The city government has spent $44 billion on construction and operating costs as well as infrastructure including airport terminals, new roads and tunnels and a three-year renovation of The Bund.
Roadbuilder Shanghai Pudong Road & Bridge Construction Co. jumped by the 10 percent daily limit to 19.82 yuan in Shanghai trading today. Property developer Shanghai Lujiazui Finance & Trade Zone Development Co. gained 10 percent to 21.66 yuan. Shanghai Construction Co. rose 9 percent to 17.35 yuan.
The Disney park will be built inside a 20-square-kilometer area earmarked for tourism development, said the Shanghai Municipal Tourism Administrative Commission.
“The Disney project will probably be a new growth engine for Shanghai and benefit companies that win building contracts,” Zhang of Huatai Securities said.