WeWork announced this week that it is selling control of WeWork China. The move aims to cut costs and reduce risk in the business, as WeWork struggles to overcome the challenges of the COVID-19 pandemic. The sale is a reversal of WeWork’s previous strategy of rapid global expansion.
Existing shareholders Trustbridge Partners will pay $200 million to acquire a majority stake in WeWork China from, WeWork’s parent company, the We Company.
WeWork said it will maintain a minority stake and participating interest but will lose operational control in the China business. As part of the deal the new owners will pay WeWork’s parent company, The We Company, an annual fee for use of the WeWork brand.
In the four years since opening its first location in 2016, WeWork China has grown to more than 100 locations across 12 cities, providing office space to around 65,000 people.
“WeWork China has built a business that has cemented WeWork’s position across the region as the market leader in flexible space,” said Sandeep Mathrani, CEO of WeWork. “The value proposition and long-term potential for WeWork is increasingly clear as the demand for flexibility at scale comes to the forefront of businesses around the world. This investment is a testament to our business and in Trustbridge we have truly found the best local partner for WeWork China’s next chapter.”
“Having watched the execution of WeWork in Greater China over the past few years, and the growing need for flexibility accelerated by the pandemic, Trustbridge firmly believes the demand that WeWork provides will only continue to increase,” said Feng Ge, Managing Partner at Trustbridge Partners.
Michael Jiang of Trustbridge Partners has been appointed as WeWork China’s acting Chief Executive Officer with immediate effect.