Wanda Film Holdings has obtained approval from the China Securities Regulatory Commission to acquire Wanda Media, Chinese media reports said, indicating that Dalian Wanda’s long-planned restructuring of its entertainment division at last has the green light to proceed. Wanda Film resumed trading on the Shenzhen stock exchange on Thursday.
Wanda Film Holdings is a subsidiary of the conglomerate led by Wang Jianlin, once the wealthiest man in China. It previously focused just on operating cinemas. The acquisition of more content production-focused Wanda Media will consolidate production, distribution and exhibition aspects of the company’s business into one entity.
Wanda Film began trying to restructure back in May 2016, and since then has announced three different overhaul plans. In the latest iteration, the company said it would purchase 95.77% of Wanda Media shares from 21 other parties, including Wanda Investment, for a sum of RMB10.5 billion ($1.56 billion).
The regulatory commission, known as the CSRC, asked Wanda to “submit supplementary materials and revised reports” within 10 working days of its Feb. 27 approval, Chinese business website Jiemian reported. “Obviously, the CSRC is still skeptical about whether Wanda Films can maintain stable growth after the completion of the acquisition,” the report said.
Wanda Film promised that Wanda Media would generate an annual profit of no less than RMB763 million in 2018, RMB 888 million in 2019, RMB1.07 billion in 2020 and RMB1.27 billion in 2021, totalling nearly RMB4 billion (about $600 million) in four years, Jiemian said.
Wanda Film operates 516 theaters and 4,571 screens in more than 180 cities in China, Australia and New Zealand. Wanda Media is behind a number of popular film and TV series, such as drama “Beijing Love Story” and last year’s “Detective Chinatown 2,” the country’s third highest-grossing film of all time.
Wanda Film released its 2018 performance report Wednesday. The company made total profits of RMB1.6 billion ($238 million) last year, down nearly 15% from the year before. Its total assets are worth RMB23.12 billion ($3.45 billion) and its operating income is RMB14.1 billion ($2.1 billion), up nearly 7% from the year before.