While becoming the embattled U.S. theme-park operator’s largest shareholder, China’s Zhonghong Zhuoye Group Co. agreed to acquire a 21 percent stake in SeaWorld Entertainment Inc. from Blackstone Group LP.

By expanding internationally, SeaWorld’s plan to restore growth is bolstered by the deal. To create its first park outside the U.S. Rivals such as Six Flags Entertainment Corp. have used similar deals to boost sales, the company announced a licensing deal in Abu Dhabi late last year.

“Completion of the deal would bolster the argument for a long-term international licensing opportunity at SeaWorld akin to the international licensing growth story that has been very positive for Six Flags,” Barton Crockett, an analyst at FBR Capital Markets & Co., said in a note.

Following the 2013 release of the documentary “Blackfish,” which argued killer whales shouldn’t be kept in captivity, SeaWorld, which owns 12 theme parks, including its namesake attractions, has battled negative publicity.

Joel Manby, who formerly ran Dollywood replaced the chief executive of the Orlando, Florida-based company in 2015 after two years of declining attendance. Manby is investing in more non-animal attractions, such as roller coasters and ocean-themed rides and has ended whale breeding at the parks.

Confidence in the company’s brand and a shared commitment to “protect wildlife and the environment,” is reflected by Zhonghong’s long-term investment, Manby said.

With regards to the development of theme parks, water parks and family entertainment centers, SeaWorld will advise its Zhonghong Holding Co. Affiliate as part of the new relationship with Zhonghong.

During a theme-park gold rush, tBottom of Form

he SeaWorld brand and expertise will help Zhonghong expand in China. But competition to amuse China’s growing middle class is intensifying with already roughly 300 attractions in China, including some ranked among the world’s worst. While Six Flags is building a new water park adjacent to the first Six Flags-branded theme park in Haiyan, Walt Disney Co. and Dalian Wanda Group Co. are among industry giants building new parks and travel destinations in China.

Citigroup analyst Jason Bazinet said in a note Friday morning that Chinese investments don’t always close, and that should temper enthusiasm even while investors cheered the transaction.

Blackstone will no longer hold any stock in SeaWorld or seats on its board with the Zhonghong transaction.

questions surrounding the disposition of its remaining stake in the company had been an “overhang” and Crockett said that Blackstone has been exiting its long-held SeaWorld position since the IPO.

The companies said that with Yongli Wang, chief strategy officer of Zhonghong Group and Yoshikazu Maruyama, president of Zhonghong Group’s American operation, taking seats, SeaWorld will increase the size of its board to 11 after the deal closes.

Zhonghong must get the approval of independent directors to buy more than 24.9 percent of shares outstanding and won’t be able to sell its stake for two years, under the pact.

The transaction is expected to close in the second quarter

(Adapted from Bloomberg)