Just a year ago, Wang described his chain of theme parks as a "pack of wolves" that would encircle and overpower Walt Disney's US$5.5 billion Shanghai Disneyland.
Wanda said it would offload 91 percent of thirteen cultural tourism projects, which include theme parks and leisure complexes, and 76 hotels to the Sunac.
Making reference to earlier acquisitions this year, namely a 17.6 billion yuan deal to invest in property transaction services provider Homelink and an ailing internet company Leshi, S&P described these acquisitions to be "opportunistic in nature, and the strategy and synergy with Sunac's main property development business remains unclear".More news: Viewings for Fallen NYPD Officer to Be Held Monday in the Bronx
The operations are among businesses being offloaded by conglomerate Dalian Wanda in one of China's biggest ever property deals.
Two managers within the corporate banking departments of mainland lenders told the South China Morning Post that they were sceptical of Wanda City's business model even before the regulator's probe.
Wanda is to use all proceeds from the deal to pay back loans, according to the report, which also cited an interview with Wang.
But Beijing began a year ago to roll out measures to stanch the flood of cash overseas, fearing capital flight, a weakening currency and expressing concerns over "irrational" investments. Another downgrade would push the rating into "junk" category. "Wanda Commercial will pay off all bank loans by the end of this year".More news: U.S. moves into medal round
Wanda had earmarked a more than 300 billion yuan investment for its cultural and tourism projects.
Notably, the merger will not include US movie studio Legendary Entertainment, which Wanda acquired for $3.5 billion in early 2016.
Sunac, whose shares in Hong Kong were suspended from trading ahead of what it said would be a "very substantial acquisition" announcement, declined to comment further. There have been no signs - yet - that Wanda intends to retreat from its significant investments in movie theaters and Hollywood production companies.More news: Normandy Four telephone conversation due in July - Ukraine's president