Dalian Wanda Group, 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.
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, without naming any companies. Earlier, Wanda said it’s aiming to complete three overseas purchases and two domestic ones, excluding cinema chains.
Wang is increasingly looking towards entertainment to spur growth as China’s slowing economy undermines his main property business. Last week, Wanda announced it will buy Legendary Entertainment, the US-based producer of “Godzilla,” for $3.5bn in cash, paving the way for Wang to become the first Chinese person to control a Hollywood film company.
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% 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 ambition to extend Wanda’s global influence. Wang said in the statement the Chinese conglomerate has spent over $15bn on overseas investments and acquisitions as of the end of 2015, with two-thirds of those investments in the US.
Legendary will join Wang’s growing global entertainment portfolio that already includes the likes of US theater chain AMC Entertainment Holdings, Infront Sports & Media and a stake in Spain’s Club Atletico de Madrid soccer team.
Wang, estimated by the Bloomberg Billinaires Index to have a fortune of $30bn, 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 signalled that bigger deals may be in the works.
On earnings, Wanda forecast total revenue will decline to 254.3bn yuan ($39bn) in 2016 as the commercial properties operations see sales drop 32% to 130bn yuan. Still, the group forecast profit will rise this year, without specifying figures.