BURBANK, Calif.--(BUSINESS WIRE)--The Walt Disney Company (NYSE: DIS) today announced that it has reached an agreement with Shanghai Shendi Group, its joint venture partner in China, to accelerate the expansion of Shanghai Disney Resort. The increased investment of approximately 5 billion yuan (US$0.8 billion) will be used primarily for additional attractions, entertainment and other offerings to increase capacity at the theme park, with the majority targeted to be completed for opening day.
“Since we first broke ground in Shanghai we’ve been very impressed with the growth of China’s economy, especially the rapid expansion of the middle class and the significant increase in travel and tourism,” said Robert A. Iger, chairman and chief executive officer of The Walt Disney Company. “Our accelerated expansion, including additional attractions and entertainment, will allow us to welcome more guests for a spectacular Disney experience on opening day.”
“Like all of our parks, Shanghai Disney Resort was designed to expand over time, and this investment allows us to bring some of those additions online earlier,” said Thomas O. Staggs, chairman of Walt Disney Parks and Resorts. “The expansion underscores the tremendous opportunity we see in Shanghai and demonstrates our long-term commitment to and confidence in China.”
The announcement of this accelerated expansion comes during a boom in China’s travel and tourism market, which is expected to continue its rapid growth. An income qualified population of 330 million people are within a three-hour travel radius of Shanghai Disney Resort. From 2012 to 2015, the Chinese travel market is projected to grow 34 percent, according to PhoCusWright. The number of upper-middle class and affluent households in China is expected to grow 18 percent annually between 2012 and 2022, according to McKinsey.
Shanghai Shendi Group will continue to hold 57 percent of the shares of the owner companies while Disney will hold the remaining 43 percent. Financing of the additional investment will be proportionate to ownership and, as with the original shareholder investment, it is not anticipated that third-party debt will be incurred to finance the expansion. In addition, Disney is the majority shareholder in the management company responsible for creating, developing and operating the Resort.
About The Walt Disney Company
The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive. Disney is a Dow 30 company and had annual revenues of $45 billion in its Fiscal Year 2013.
Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management’s views and assumptions regarding future events and business performance as of the time the statements are made. Management does not undertake any obligation to update these statements. Actual events may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, as well as from developments beyond the Company's control, including international, political, health concern and military developments and changes in domestic and global economic conditions that may affect our businesses generally. Additional factors are set forth in the Company's Annual Report on Form 10-K for the year ended September 28, 2013 under Item 1A, "Risk Factors," and subsequent reports.