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Published: Wed, March 29, 2017
Economy | By Melissa Porter

China's Zhonghong Zhuoye to buy Blackstone's stake in SeaWorld

China's Zhonghong Zhuoye to buy Blackstone's stake in SeaWorld

China's Zhonghong Group has bought a minority ownership stake in SeaWorld, making it the company's largest single shareholder.

NEW YORK (AP) — Shares of SeaWorld, which have been cut in half since coming under scrutiny over the killer whales it holds in captivity, are up 12 percent before the opening bell on a big investment from China. The deal includes licensing and consulting for theme park development in China, which should clear the path for Zhonghong to bring the SeaWorld brand to new parks there.

The 21 percent stake in the company comes from private equity firm Blackstone Group, which formerly owned half of the Universal Orlando Resort and now maintains a stake in Legoland owner Merlin Entertainments.

SeaWorld will also increase the size of its board to 11, including two executives from Zhonghong Group.

However, its reputation was tainted by scandals and by strong opposition from environmental organizations.

In December, SeaWorld announced plans for its first non-U.S. property.

The agreement also contains certain restrictions on Zhonghong Group's ability to sell its interest in SeaWorld for a period of two years, limitations on its ability to acquire more than 24.9% of SeaWorld's outstanding shares without the approval of the independent directors of SeaWorld's Board and other customary restrictions including voting and standstill to protect SeaWorld and all of its stockholders. Its stock price has fallen by a third since CNN released the documentary "Blackfish" in 2013.

However, under public pressure, SeaWorld last March announced it would stop breeding killer whales, and would no longer keep any of them in captivity after its current generation dies.

Animal rights groups charge that killer whales were kept in tanks that are too small, fed improper diets and forced to perform tricks. Last year, the Zhonghong Group acquired luxury tour operator Abercrombie & Kent.

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