Disney Breaks Ground on Shanghai Resort
The resort, with a $4.4 billion initial investment, will encompass a theme park, two hotels, an entertainment venue, lake and other attractions.
The Walt Disney Co., along with its Chinese partner the Shanghai Shendi Group, broke ground on Shanghai Disney Resort on Friday, a deal worth $4.4 billion that is one of the largest foreign investments ever made in China.
Disney had been negotiating with the Chinese government for 10 years before getting approval on the resort.
The initial investment in the project will total $3.7 billion to build the theme park and an additional $700 million to build the other aspects. The investment amounts will be split between Disney and the Shanghai Shendi Group, with Disney holding 43% of the shares of the owner companies and the Shanghai Shendi Group holding the remaining 57%. Financing will be proportional to ownership.
In addition, a joint venture management company will be formed, with Disney having a 70% stake and Shanghai Shendi Group having a 30% stake. The management company will be responsible for creating, developing and operating the resort.
The deal marks one of the largest foreign investments ever made in China.
The resort, which is scheduled to open in about five years, will encompass the Magic Kingdom-style theme park Shanghai Disneyland, which will feature attractions tailored specifically for Chinese citizens; two themed hotels; a large retail, dining and entertainment venue; recreational facilities; a lake; and associated parking and transportation hubs. On Opening Day, the resort will cover 963 acres, with additional room to expand.
"Today marks a significant milestone in the history of the Walt Disney Co.," Iger said. "Our Shanghai resort will be a world-class family vacation destination that combines classic Disney characters and storytelling with the uniqueness and beauty of China."
Added Walt Disney Parks and Resorts chairman Thomas Staggs: "We are hard at work designing Shanghai Disneyland, which when complete will be a special place where guests of all ages will discover a world of imagination, creativity, adventure and thrills."
Friday's groundbreaking ceremony paid tribute to the culture and people of China and featured traditional Chinese drum music, a female soloist singing in Mandarin, a 50-voice Shanghai children's choir and Mickey Mouse dressed in a traditional Chinese costume.
Iger and Staggs were joined by Shanghai Party Secretary Yu Zhengsheng and Shanghai Mayor Han Zheng to officially break ground on the project.
The park's ownership split of 43% to Disney is exactly the same as Hong Kong Disneyland. Since it opened in 2005, Hong Kong Disneyland has experienced lower-than-expected attendance with 42 percent of its guests last year coming from the rest of China, according to the park's statistics.