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Dalian Wanda of China to Spend $1.6 Billion on Yacht Maker and London Hotel

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June 20, 2013

Dalian Wanda of China to Spend $1.6 Billion on Yacht Maker and London Hotel

Dancers performing at a Dalian Wanda Group event in Beijing on Wednesday.HONG KONG ? When it was launched on the Huangpu River in Shanghai in July 2010 with its mirrored windows, Jacuzzi-fitted deck and a price tag of more than $10 million, the Wanda 2 ? a customized version of the Predator 108 featured in the 2006 James Bond film ?Casino Royale? ? was described by its British builder as the ?biggest, most expensive and most luxurious private yacht in the history of yachting in China.?

Now, the owner of the Wanda 2, Wang Jianlin, the billionaire chairman of the privately held Dalian Wanda Group, is betting there are others out there who are ready to one-up him.

On Wednesday, Mr. Wang?s company, which last year bought the American cinema chain AMC Entertainment for $2.6 billion, said it would invest ?1 billion ($1.6 billion) to acquire Sunseeker International, the British yacht maker that built the Wanda 2, and to build a luxury hotel in London.

Dalian Wanda said it would pay ?320 million for a 91.8 percent stake in Sunseeker, based in Dorset, England, with the remaining stake to be acquired by Sunseeker management.

?Sunseeker is well-placed to take full advantage of opportunities in China, one of the world?s fastest-growing luxury yacht markets,? Mr. Wang said in a news release. ?Acquiring Sunseeker deepens Wanda?s international influence, further enhances our position in the global luxury, entertainment and tourism markets, and represents an important step forward for the overall development of our business.?

Before 2006, total overseas acquisitions by Chinese companies never topped $10 billion a year. But in the past five years, companies from China have gone on a shopping spree, spending $40 billion to $70 billion annually on foreign targets, according to?Thomson Reuters?data.

More often than not, these deals have focused on securing resources like oil, natural gas and minerals to fuel economic growth back home, or gaining control of advanced technologies and know-how to help Chinese companies move up the global value chain.

Those remain important drivers, but more recently, China?s overseas purchases have focused on domestic demand ? companies are seeking the cachet of a foreign brand to help increase their market share and pricing power in the race to woo the increasingly powerful Chinese consumer.

Andr? Loesekrug-Pietri, chairman and managing partner of A Capital China Outbound Fund, a Brussels-based?private equity?fund, saw this come into play last month. Club Med, the French resort operator, received a $700 million buyout offer led by its two largest shareholders, an investment unit of the French insurer AXA and a Chinese conglomerate called Fosun International. Mr. Loesekrug-Pietri said he had helped bring Fosun in as a minority investor in Club Med in 2010, and the buyout bid brought things full circle.

In a separate deal last year, his fund made a strategic investment alongside a Chinese company in Bang & Olufsen, a Danish brand of high-end audiovisual equipment.

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Source: Neil Gough (2013). Dalian Wanda of China to Spend $1.6 Billion on Yacht Maker and London Hotel, DealB%k?http://dealbook.nytimes.com/2013/06/19/dalian-wanda-of-china-to-spend-1-6-billion-on-yacht-maker-and-london-hotel/ published Jun 19, 2013. Viewed Jun 20, 2013.

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