DALIAN, China -- Dalian Wanda Group has bid farewell to its theme park business, and with it the dream of becoming "China's Disney."
The Chinese property developer recently agreed to sell the operating rights to 13 theme parks to domestic peer Sunac China Holdings for 6.3 billion yuan ($909 million), in a deal that effectively pulls the plug on Wanda's theme park business.
The conglomerate is now expected to focus on operating cinema and commercial facilities, as it tries to turn itself around and repay significant debts.
Wanda agreed to sell Sunac a 75% stake in theme park operator Chengdu Wanda Theme Cultural and Tourism Management, which was held by Chairman Wang Jianlin, for 4.5 billion yuan, along with an investment subsidiary.
Chengdu Wanda ran theme parks, hotels and large-scale commercial complexes in Qingdao, Harbin and other parts of China.
In July 2017, Wanda sold the parks themselves and other assets like hotels to Sunac and another company for about 63.7 billion yuan, but continued to operate and manage the facilities under the Wanda brand.
Sunac will now likely run the parks under a different name, meaning the facilities will have almost no relationship with Wanda.
As motivation for the divestment, Wanda cited "various inconveniences" arising from the separation of ownership and operation, which impeded progress in construction work and other issues.
But it is widely believed that the company decided to unload the operating rights to prioritize repaying swollen debts.
Wanda made its money in property, through activities like selling condominiums as China's economy grew. It later diversified into commercial facilities, cinemas and sports.
The company also expanded overseas, buying up companies like cinema-related businesses. At one point, Wang became Asia's richest man, with a net worth of over $30 billion.
As part of its drive to diversify, Wanda dived headfirst into theme parks in 2016. Wang even said that he would prevent Shanghai Disneyland, which opened the same year, from making a profit for at least 20 years.
In an effort to overwhelm its American rival, Wanda set up parks around Shanghai and various other parts of China. "One tiger is no match for a pack of wolves," Wang is quoted as saying.
The wheels began to come off in 2017, however. The acquisitions came at a cost, and the company's interest-bearing debts at one point reached 200 billion yuan.
The Chinese authorities then stepped in, asked banks to stop lending to the company and ordered it to stop investing overseas.
In addition to divesting its theme parks, which have not been hugely popular with consumers, Wanda took on equity investments in its group companies from internet giants Alibaba Group Holding and Tencent Holdings.
The latest deal with Sunac, it appears, presents a way out of an unprofitable business and an opportunity to reduce debts. It also puts an end to any ambitions of beating Disney.
The cinemas and commercial facilities Wanda now intends to focus on are faring relatively well. But a full revival remains a long way off amid an uncertain consumption environment stemming from China's trade war with the U.S.