Wanda Group Plans Five `Substantial' Acquisitions as Sales Slump

  • Jianlin's Wanda aims for 3 overseas deals, 2 domestic ones
  • Wanda forecasts that sales will decline 12% this year

Dalian Wanda Group Co., the property-to-entertainment conglomerate headed by Asia’s richest man, is planning five "substantial" acquisitions this year as the company braces for a drop in sales.

Wang Jianlin.
Wang Jianlin.
Photographer: Tomohiro Ohsumi/Bloomberg

Wanda’s pursuit of targets will focus on companies in the entertainment and sports industries, Chairman Wang Jianlin said at a briefing in Hong Kong on Tuesday, without naming any companies. Earlier, Wanda said it’s aiming to complete three overseas purchases and two domestic ones, excluding cinema chains.

Wang Jianlin speaks on Monday, Jan. 18.
Wang Jianlin speaks on Monday, Jan. 18.
Photographer: Justin Chin/Bloomberg

Wang is increasingly looking toward entertainment to spur growth as China’s slowing economy undermines his main property business. Last week, Wanda announced it will buy Legendary Entertainment, the U.S.-based producer of "Godzilla," for $3.5 billion in cash, paving the way for Wang to become the first Chinese person to control a Hollywood film company.

Difficult Deals

Though he’s been increasingly acquisitive in recent years, Wang said deals don’t come easy.

"When I want to buy, they won’t sell and when they want to sell, I don’t want to buy," Wang said.

Separately, Wanda forecast that sales will fall 12 percent in 2016 as slumping revenue from its main real estate business overshadows gains from the burgeoning entertainment operations, the first time it is seeing a drop since at least 2009, when the firm started disclosing annual targets.

Wang said that his firm is diversifying away from property -- currently Wanda’s biggest revenue generator -- because it’s not a long-term growth business.

Legendary is the latest example of the billionaire’s ambitious to extend Wanda’s global influence. Wang said in the statement the Chinese conglomerate has spent over $15 billion on overseas investments and acquisitions as of the end of 2015, with two-thirds of those investments in the U.S.

Entertainment Empire

Legendary will join Wang’s growing global entertainment portfolio that already includes the likes of U.S. theater chain AMC Entertainment Holdings Inc., Infront Sports & Media AG and a stake in Spain’s Club Atletico de Madrid soccer team.

Wang, estimated by the Bloomberg Billionaires Index to have a fortune of $30 billion, said last week that he’s looking to buy cinema assets in Europe but is waiting for the right time because prices are too high. In its latest statement, the group said Wanda Cinema will continue expanding via the purchase of local theater chains.

At a signing ceremony in Beijing last week after agreeing to acquire Legendary, Wang signaled that bigger deals may be in the works.

On earnings, Wanda forecast total revenue will decline to 254.3 billion yuan ($39 billion) in 2016 as the commercial properties operations see sales drop 32 percent to 130 billion yuan.  Still, the group forecast profit will rise this year, without specifying figures.

The entertainment business, called Wanda Cultural Industry Group, will probably see sales increase 30 percent to 66.6 billion yuan, helped by earnings from Legendary Entertainment, according to Wanda.

Longer term, Wang said on Tuesday that Wanda’s revenue will climb at least 15 percent each year until it reaches $100 billion by the end of the decade as the group diversifies away from real estate property.

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