Alibaba acquire stake in Wanda Film for $750 million
Alibaba acquire stake in Wanda Film for $750 million

E-commerce giant Alibaba today announced to buy a stake Troubled Chinese conglomerate Wanda, the cinema division for around $750 million, the latest sell-off by the heavily-indebted group.

Wanda Film said in a regulatory filing that Alibaba will buy a 7.66 per cent stake for 4.68 billion yuan, and a holding company controlled by the Beijing government will take 5.11 per cent for 3.12 billion yuan (around $500 million), generating over $1.2 billion for the conglomerate.

Following rapid diversification, Wanda ended up mired in debt and under the scrutiny of Chinese regulators, forcing its head Wang Jianlin -- once China's richest man -- to sell off parts of his empire.

It raised $5.4 billion through a stake sale last month, and retail link-up with several investors, including Chinese internet giant Tencent.

According to the Wanda Group website, Wanda Film owns 1,352 cinemas around the world with more than 14,000 screens -- around 12 per cent of the global box office.

 Alibaba will now become the second-largest shareholder in the division, strengthening its position in China's massive entertainment market.

Originally Wanda specialised in real estate, but later diversified into cinema, amusement parks and sports -- including the 2015 acquisition of a 20-percent stake in Spanish top-flight football club Atletico Madrid. But Beijing, which has been trying to control the surge in Chinese corporate debt, was alarmed by Wanda's "irrational" purchases, which were largely financed through borrowing.

With its 2016 purchase of a minority stake in Steven Spielberg's Amblin Partners, which owns DreamWorks Pictures, the e-commerce behemoth already has a foothold in Hollywood.

 
Stay on top – Get the daily news from Indian Retailer in your inbox
Also Worth Reading