Chinese tech giant Tencent is heading a group of investors who are paying $5.4bn to acquire a 14% stake in Wanda Commercial Properties.
The deal enables minority shareholders in Wanda’s commercial property arm, which delisted from the Hong Kong stock exchange in 2016, to offload their shares.
Wanda promised its minority shareholders that it would re-list in mainland China, but was unable to do so as it came under increased government scrutiny for its aggressive international expansion and mounting debts.
Joining Tencent in the bailout are retail giant Suning Holdings, ecommerce platform JD.com and property group Sunac China Holdings. Following the acquisition, Wanda Commercial will be renamed as Wanda Commercial Management Group and focus on commercial management rather than property development.
“This represents one of the world’s largest single strategic investments between internet companies and brick-and-mortar commercial giants,” Wanda said in a statement.
Sunac was also involved in a deal last year to buy out Wanda’s leisure and tourism projects, including the Wanda studios in Qingdao. Chinese authorities seem to be using the Tianjin-based property group to rescue distressed corporate assets – it also invested in struggling tech giant LeEco last year.
Meanwhile, Tencent also recently acquired a minority stake, understood to be around 10%, in David Ellison’s Skydance Media, which produces the Mission: Impossible, Star Trek and Terminator franchises. It appears that Tencent has been able to go ahead with the deal despite the Chinese government’s recent crackdown on overseas acquisitions.
Described as the flagship company of Dalian Wanda Group, Wanda Commercial holds around 31.51 million square meters of operating commercial property spaces, including 235 Wanda Plazas in China, which received 3.19 billion visitors in 2017.