ADIA and Mubadala Join Group of Investors to Acquire 60% Stake in Dalian Wanda Group

The UAE’s Mubadala Investment Company and Platinum Peony B 2023 RSC Limited, a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), have joined a consortium of investors including the Hong Kong-based equity giant PAG, CITIC Capital, Ares Management, to acquire 60% stake in Newland Commercial Management (NCM), which manages several shopping malls including the world’s biggest shopping mall for approximately $8.3 billion.

Newland Commercial Management is owned by China’s Dalian Wanda group, which earlier had 78.9% stake will now hold the remaining 40%. The latest investment comes as a big relief to Dalian Wanda group, which has been facing liquidity crisis for some time.

Newland is a newly formed holding company of Zhuhai Wanda Commercial Management Group Co Ltd, a leader in shopping mall management for over 20 years which currently manages 496 large-scale shopping malls across China.

David Wong, Partner and Co-Head of Private Equity at PAG, said that this investment reflected the expectation and recognition of Newland’s long-term growth potential by international institutional investors. We like the competitive edge and first mover advantage that Newland has built and we think these advantages will allow it to generate stable and growing cash flow to investors.

Yichen Zhang, Chairman and CEO of CITIC Capital, said that they believe in the large potential of the business services market in China. As a frontrunner in the industry, Newland has significant competitive advantages and growth prospect.

We are confident that this investment will provide Newland with lasting stability and support, facilitating the company’s robust and rapid growth, and drive further value creation, Zhang added.

In August 2021, PAG, CITIC Capital, Ares and other existing investors invested in this business. In the three years since then, it has consistently outperformed its financial targets and has generated net profit of $800 million in 2021, $1.1 billion in 2022, and $1.3 billion in 2023, representing an annual growth rate of around 32%.

Restructuring Announced in December

On 12 December 2023, PAG and Dalian Wanda Commercial Management Group jointly announced the signing of an investment agreement framework to restructure Zhuhai Wanda Commercial Management.

The latest agreement signed is a follow-up to the decisions taken on December 12. This investment will facilitate corporate governance independent from its former parent, provide better incentives for its management, and support Newland’s continued operational improvement.

The investors are committed to further strengthening Newland’s market-leading position in the industry.

It may be recalled that ADIA was holding talks with Dalian Wanda Group to buy a minority stake in the mall operator as the latter’s shareholders werer reportedly looking to offload their stakes due to a downturn in its valuation.

Mubadala has been on an investment spree in the last few days and it has invested in Avanse Financial Services Ltd. (Avanse), India’s new age, technologically advanced, education-focused non-banking financial company (NBFC) and also completely acquired Dubai-based KELIX bio, a specialty pharmaceutical business focused on delivering complex generics across emerging markets.