Wanda Boss Signals Retreat From Hollywood Dealmaking
A little less than a year ago, Chinese billionaire Wang Jianlin said he planned to pour billions into all six of Hollywood’s major studios.Now he’s unlikely to sign a sizable deal with any of them.
Addressing the swift regulatory crackdown that has engulfed his Dalian Wanda Group in recent weeks, Wang said his new international investment strategy would essentially be a retreat from the world stage.
“Wanda will respond to the state’s call and has decided to keep its main investment within China,” Wang told Caixin, a leading Chinese business news outlet, over the weekend.
Wang’s statements were followed Sunday by reports that Beijing’s recent clampdown on Wanda’s international dealmaking was approved by Chinese president Xi Jinping himself. The news suggests that Beijing’s about-face on the topic of outbound investment — from previously encouraging Chinese companies to go global to aggressively reining them in — is a priority that stretches to the very top of the Chinese leadership.
The government’s stern handling of Wanda, one of the country’s preeminent and most politically connected firms, is sending a strong signal across the Chinese corporate landscape, which could put a damper on any major Chinese investment in Hollywood.
“It feels like an avalanche,” Jingzhou Tao, a lawyer at Dechert LLP in Beijing specializing in mergers and acquisitions, told The Wall Street Journal. “This is sending a shock wave through the business community.”
Responding to the shifting regulatory winds, Wang has curtailed his ambitions with the same boldness he became known for in expansion. After boasting last year that he would drive Disney out of China’s theme park sector, the billionaire recently beat a surprise retreat, unveiling a $6.5 billion sell-off of 13 major theme park projects, as well as a $3 billion sale of 77 Wanda hotels (the deal was mysteriously reworked a week after it was announced, with Wanda upping the price tag by $200 million but receiving additional investor scrutiny for the change-up).
Asked by Caixin on Saturday to explain the background to the asset sale, Wang suggested that a key driver was a recent high-level economic policy conference convened by Xi Jinping, which called for a reduction in corporate indebtedness.