HONG KONG -- An "all-star" team of Chinese investors led by internet conglomerate Tencent Holdings agreed to pour 34 billion yuan ($5.4 billion) into Dalian Wanda Group's flagship unit on Monday, marking the world's largest deal between web and brick-and-mortar businesses.
The consortium also includes internet retailer Suning Commerce Group, U.S.- listed JD.com and property developer Sunac China Holdings, according to a statement released on Dalian Wanda's website. They will collectively buy out the 14% equity interest purchased by investors when Wanda Commercial Properties was delisted from the Hong Kong stock exchange in 2016.
The $5.4 billion "strategic agreement" will see Wanda's property unit renamed as "Wanda Commercial Management Group," with a sole focus on commercial property management in the future.
After the deal, the unit will sell off all the existing for-sale properties in its books over the next one or two years and stop engaging in any property development so that it can go public as soon as possible, the statement said.
This came after the Dalian-based conglomerate's Chairman Wang Jianlin vowed to reduce debt to an "absolutely safe" level in about two to three years. The group has been under the scrutiny of Chinese regulators since last July on fears that it posed systemic risks to domestic lenders due to its heavy borrowing to fund trophy projects overseas.
The company, who claims to be the world's biggest commercial property company, held 31.51 million square meters of operating property space and operated 235 Wanda Plazas at the end of 2017.
"Wanda Commercial Management Group will utilize the huge 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," the group said in the statement.
The new company will also form a strategic relationship with Tencent to improve their online-offline integration, and achieve the goal of opening 1,000 Wanda Plazas as early as possible with the new investors' financial support.