Property magnate Wang Jianlin has found the capital to fund his HK$30 billion (US$3.8 billion) plan to take his Hong Kong-listed flagship private, enlisting a trio of China’s largest e-commerce retailers to what he calls the world’s biggest single alliance between the new economy and bricks-and-mortar businesses.

Tencent Holdings has partnered with Suning Commerce Group, JD.com and Sunac China Holdings to buy a 14 per cent stake in Wanda Commercial Properties, Wang’s property arm, for 34 billion yuan (US$5.4 billion), according to a statement by Dalian Wanda Group.

One of the biggest Chinese asset buyers says Wanda’s spendthrift, cash-burning days are over

Wang, once the wealthiest businessman in China, had been trying since September 2016 to fund the delisting of Wanda Commercial Properties from the Hong Kong exchange, aiming to list it in Shanghai for higher valuation. The exercise is estimated to cost HK$30 billion, according to investment bankers.

In a January 20 speech to Wanda’s staff, Wang said he had arranged for financing for his undertaking. The funding was part of the strategic review of Wanda’s property projects and would consider any business opportunities that could create value for shareholders.

Wanda Commercial’s total debt was 279 billion yuan as of end-June, according to ratings agency S&P.

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The four investors will acquire the stake held by investors in Wanda Commercial when the company delisted from the Hong Kong stock exchange in September 2016.

Tencent’s investment of 10 billion yuan gives it a 4.12 per cent stake, while Suning and Sunac’s outlay of 9.5 billion yuan respectively will them a 3.91 per cent stake each, while JD.com’s 5 billion yuan will fetch a 2 per cent stake in Wanda Commercial.

Following the stake sale, Wanda Commercial will be renamed as Wanda Commercial Management Group.

The deal represents one of the world’s largest single strategic investments between internet companies and bricks-and-mortar commercial giants
Wanda statement

WeChat operator Tencent announced last week that it would take a possible stake in French retailer Carrefour’s China operations, along with local retailer Yonghui Superstores. It follows Amazon’s acquisition of Whole Foods for US$13.7 billion. The moves suggest that the global e-commerce titans are seeking new growth points for their business while trying to expand the use of their mobile payment tools offline.

Wanda Commercial Management Group will utilise the online resources owned by Tencent, Suning, and JD.com, and its own vast offline commercial assets to carry out various collaborations, jointly building a “new consumption” model in China that will integrate both online and offline services, said the company.

The flagship company of Dalian Wanda Group, the company last year operated 235 Wanda Plazas in China that welcomed 3.19 billion visitors. The company plans to stop engaging in property development and will transform into a company solely focused on commercial management.

It will also seek to go public as soon as possible.

Tencent may invest in Carrefour China as internet giants extend retail war

In terms of offline development, the four investors will use their financial prowess to support Wanda Commercial to speed up its growth, helping the company to achieve its goal of 1,000 Wanda Plazas in China as early as possible.

Separately on Monday, Wanda Hotel Development, another unit under the Chinese conglomerate, said it had agreed to sell its two Australian projects for a total of US$913 million in equity and assumed debt, according to a filing on the Hong Kong stock exchange.

The disposal of the company, which owns the One Circular Quay in Sydney and 55 per cent of the Jewel Resort on the Gold Coast, both under development, would lead to a gain of about HK$556 million for Wanda Group, it said.

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