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Feb.6 (NBD) -- According to company filings of Wanda Film Holding Co. (Wanda Film) Monday night, its controlling shareholder Wanda Investment will sell a 12.77 percent stake to Alibaba-backed Zhenxi Investment Management Co. (Zhenxi Investment) and state-backed Beijing Cultural Investment Holdings Ltd (Cultural Investment) for a total of 7.8 billion yuan (1.2 billion U.S. dollars), making them the second and third largest shareholders, respectively.

Investors bring in cutural and entertainment resources

According to company filings of Wanda Film Monday night, Wanda Investment plans to sell a 5.11 percent stake in Wanda Film to Cultural Investment and another 7.66 percent stake to Zhenxi Investment for and 3.12 billion yuan (494.7 million U.S. dollars)and 4.68 billion yuan (742.0 million U.S. dollars), respectively.

Upon the completion of the transaction, Wanda Investment will hold a 45.59 percent stake in Wanda Film, and Wang Jianlin remains the actual controller of the latter.

NBD noticed that those two strategic partners are powerful investors in the film industry.

Cultural Investment is a listed company with the State-owned Cultural Assets Supervision and Administration Office of the People's Government of Beijing Municipality as its actual controller.

The company mainly engages in film investment, production and distribution, cinema management, entertainment and games development. So far, Cultural Investment has invested in project including Jackie Chan Cinema, Beijing Huairou Movie and TV Industry Zone, and Universal Studios.

Zhenxi Investment is backed by the internet giant Alibaba. Alibaba Group officially set up its cutural and entertainment unit in October 2016, which consists of Alibaba Pictures, Youku Tudou, UC browser, Alibaba Music, Alibaba Literature, Alibaba Games and ticketing platform Daimai.cn.

Alibaba Pictures is internet-based and offers a well-rounded entertainment platform, which specializes in content making and distributing, IP authorizing, ticketing management and data services.

Alibaba eyes not only financial investment but also strategic cooperation

In addition to the investments, Wanda Film will cooperate with Alibaba and Cultural Investment on areas including film distribution, marketing, financing as well as pre-screening advertising and online ticketing, according to the filing.

According to company filings of Wanda Film, the company has a track record in cinema management and controlling shareholder of Cultural Investment is an important financing platform for Beijing's cultural and creativity industry. The two parties will jointly work on cinema franchising, film advertising, production investment, device maintenance, offline live entertainment and equity investment.

Sources close to Alibaba told NBD that Alibaba Pictures will join hands with Wanda Film to form a super-mega distributing system that can integrate both online and offline resources. Moreover, Alibaba's ticketing platform Tao Piao Piao is also expected to benefit from the cooperation. 

Wanda Group told NBD that the deals are made to bring in strategic partners, rather than simply cash in on Wanda Film shares. The two strategic investors and Wanda Film are expected to complement one another.

Yan Yuejin, director of the E-house China R&D Institute, noted that by joining hands with Alibaba, Wanda Film will be further expanding its film businesses and make all-round development in the film industry.

In addition, Wanda Film has already forged extensive cooperation with Tencent, JD and Alibaba, which will facilitate the company to realize a new strategic development that can help reduce costs and expand market shares, Yan added.

 

Email: tanyuhan@nbd.com.cn