Wanda Cultural Industry Group merges entire tourism business with LY.com

On October 9, Wanda Cultural Industry Group and Ly.com jointly announced that Wanda Beijing Tourism Investment Company (hereinafter referred to as "Wanda Tourism") under the Wanda Cultural Industry Group will be completely merged with LY.com International Travel Co., Ltd. (hereinafter referred to as "LY.com International Travel") under LY.com. Post-merger, the new company will become the largest travel agency in China, fully realizing integrated online-offline  growth.

LY.com will obtain 100% stake in Wanda Tourism by way of cash and shares, while Wanda Cultural Industry Group will increase its stake in LY.com, solidifying and lifting its status as the largest shareholder of LY.com. LY.com International Travel will set up a support center at the travel agency headquarters to coordinate post-merger business management and other tasks pertaining to these travel agencies.

Merging the entire Wanda Tourism with LY.com is mutually beneficial for three parties. Wanda Cultural Industry Group will be able to better leverage LY.com's online-offline network to deliver customer sources to Wanda's tourism destinations, and better focus on core business growth, enhancing the sharing of the growth of LY.com's value. LY.com is committed to opening up offline channels. Merging with Wanda Tourism will allow LY.com's offline business to grow exponentially, further strengthening LY.com's online and offline integration advantages. All travel agencies under Wanda Tourism will also open up online channels, and realize better growth for themselves.

Wanda Tourism has completed the acquisition of 12 quality local travel agencies in 12 provinces and cities, namely Hubei, Beijing, Jiangxi, Anhui, Shenzhen, Qingdao, Wuxi, Zhejiang, Nanjing, Hunan, Kunming and XIamen. In 2015, operating revenue amounted to Rmb12 billion with 2016 revenue forecast at more than Rmb16 billion. LY.com International Travel is currently already rolling out plans in close to 200 cities nationwide with offline directly operated experiential stores of more than 300 and staff in excess of 10,000. It is forecast that 2016 revenue would surpass Rmb10 billion. LY.com's 2016 transaction volume is forecast to exceed Rmb60 billion with reported revenue of Rmb20 billion, serving more than 300 million persons.

In July 2015, Wanda Cultural Industry Group made a strategic investment in LY.com, becoming the largest shareholder of the latter. Centered on the tourism destinations developed and launched by Wanda, both parties have synergies in terms of resources, products, sources of customers, channels and many other areas, and results are significant, laying an excellent foundation for this merger.