Dalian Wanda in €1b sports rights deal

Dalian Wanda extends acquisition spree with agreement to buy Infront Sports & Media, which has a partnership with FIFA and is run by the nephew of the current FIFA president.
Infront is partner to AC Milan, one of two football clubs in the Italian city.
Infront is partner to AC Milan, one of two football clubs in the Italian city.

Dalian Wanda agreed on Tuesday to buy sports marketing company Infront Sports & Media from European private equity company Bridgepoint for €1.05 billion ($1.2 billion), extending its buying spree beyond its core real estate market.

Dalian Wanda, backed by Chinese billionaire Wan Jianlin, has been aggressively making acquisitions.

Last month, it bought a 20% stake in Spanish football team Atletico Madrid and separately agreed to buy some prime office buildings overlooking Sydney Harbour Bridge from Blackstone.

In 2012, the group also bought cinema chain AMC Entertainment for $2.6 billion including debt.

Its latest deal will secure Dalian Wanda, one of China's biggest property developers, partnerships with 160 rights holders in 25 sports and with hundreds of sponsors and media brands.

“Infront, through its long-standing partnerships with some of the most important sports rights-holders, is top-connected in the global sports industry,” Wang Jianlin, chairman of Dalian Wanda group, said in a release. “It is best-positioned to actively support China in its bidding efforts for major sports events,” he added.

Infront is partner to Fédération Internationale de Football Association, better known as FIFA, as well as to the German and Italian football federations and to Milan's two main football clubs.

Infront also represents all seven Olympic winter sports federations including the International Ski Federation and the International Ice Hockey Federation.

It has more than 25 offices in 13 countries and in 2014 generated revenues of over €800 million ($913 million). 

Following the acquisition, Infront's management team led by chief executive officer Philippe Blatter will remain in place. Blatter is the nephew of FIFA president Sepp Blatter.

Still a property company

Although the group's non property-related deals have grabbed some of the limelight lately, Dalian Wanda is still heavily reliant on its real estate business, which is exposed to weakening property prices and oversupply in mainland China.

“The company [Dalian Wanda group] is very high profile, especially in their diversification into the culture and tourism business, but if you look at their financial statements, the majority of the income, revenue, assets and profits are still from the property segment,” Laura Li, an analyst at credit ratings firm Standard & Poor's, said.

Dalian Wanda group is privately-held but it spun off Dalian Wanda Commercial Properties, the world's second-largest developer of shopping malls and office buildings, in a $3.72 billion Hong Kong flotation late last year.

Li said that she has concerns over Dalian Wanda Commercial Properties' debt levels, and since it still contributes to the majority of the group's income, the same holds true for the group.

Dalian Wanda group was founded in 1988 and operates in four key business segments, namely commercial property, entertainment & tourism, e-commerce and financial services.

In 2014, the group's total assets were Rmb534.1 billion ($86.8 billion) and its annual income reached Rmb 242.5 billion ($39.4 billion). It operates 109 Wanda Plazas, 71 hotels, 6,600 cinema screens and 99 department stores in China.

Wanda was advised by Shankai Sports, PwC and Reed Smith. Bridgepoint was advised by Lazard, KPMG, Latham & Watkins, Niederer Kraft & Frey and Clifford Chance. Infront's management was advised by Blättchen & Partner and Homburger.

Bridgepoint, which acquired Infront in 2011, is a European private equity firm that focuses on the acquisition of companies valued at up to €1 billion. To date, it has raised some €11 billion of capital. 

 

 

 

 

 

 

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