SHANGHAI, China (AP) - Universal Studios has reached a preliminary agreement to build a theme park in Shanghai, mainland China's biggest city, the Shanghai government said Friday.
In a written statement, the government called it "an agreement in principle," meaning more negotiations remain ahead. City officials refused to disclose the details.
The Asian Wall Street Journal reported Friday that the deal could be worth $870 million. It said Universal will pay $100 million for a one-third stake, sharing the project with two Chinese government companies. The park could open as soon as 2006, the newspaper said.
An employee at Universal's Shanghai office said managers there were not available for comment.
The announcement appears to open the way for the first international-class theme park in China. It would compete with a new Disneyland scheduled to open in Hong Kong in 2005.
The agreement could give Universal a lead in China's vast market over Disney, which has also reportedly been searching for a mainland theme park site.
Shanghai is an appealing market for foreign investors, with 17 million people and one of China's highest average incomes - about $1,600 a year.
"Shanghai Universal Studio theme park will be based on many outstanding Hollywood movies, using high technology to let visitors vividly experience for themselves scenes from these movies," the statement said.
Executives from Los Angeles-based Universal, which is owned by France's Vivendi Universal Entertainment, have made repeated visits to China to scout locations in Beijing and the southern city of Shenzhen, as well as Shanghai.
The Shanghai sites were in Pudong, a newly developed district on the eastern edge of the city that is home to futuristic skyscrapers and the city's stock exchange.
One official of the Pudong district government told The Associated Press that the site would take up 2 to 4 square miles, though the Asian Wall Street Journal report said it was less than one square mile. The official refused to give his name.
Universal's Chinese partners will be two city-owned companies - Waigaoqiao Holding Co., a dockyard operator, and Jinjiang Group, which runs another an amusement park near Shanghai.
The Shanghai park would be Universal's second in Asia, after one in Osaka, Japan. The company also operates parks in Florida, California and Spain and has said is considering one in Germany.