Ties between the U.S. and Chinese movie industries have warmed after China agreed in February to open its market to more American films, with DreamWorks Animation announcing a landmark deal in the same month to build a production studio in Shanghai.
AMC and Wanda had held off-and-on discussions about a possible deal more than a year ago. Talks grew serious after AMC, the world’s largest operator of IMAX screens, cancelled its plans to go public, according to media reports.
“This acquisition will help make Wanda a truly global cinema owner, with theatres and technology that enhance the movie-going experience for audiences in the world’s two largest movie markets,” Wang Jianlin, chairman and president of Wanda, said in a press release on Monday.
Citigroup advised AMC, while Ernst & Young advised Wanda, according to the statement issued by the U.S. theatre operator.
Wanda will invest up to an additional $500 million in AMC, the company said, and has reached an agreement for AMC’s management team to stay on after the deal closes.
The transaction is not expected to affect employee levels at Kansas City, Missouri-based AMC, said the companies.
Wanda operates 86 theatres with 730 screens, stages large-scale live shows, produces and distributes films, and runs entertainment chains.
It is a private conglomerate operating only in China, with $16.7 billion in annual revenue and $35 billion in assets. The group focuses on commercial properties, luxury hotels, tourism investment, department stores and cultural businesses.
AMC is owned by an investment group that includes Bain Capital, CCMP Capital Advisors and Spectrum Equity Capital.
The deal underscores the appetite of Chinese private sector companies for overseas assets, which has so far tended to be the work of state owned enterprises.
Cash-rich private sector Chinese companies are also looking to snap up niche technology and branded companies in Europe, many of which are reeling under the debt crisis.
Earlier this year, privately owned Sany heavy Industry, controlled by China’s richest man Liang Wengen, agreed to buy Germany pump maker Putzmeister for 360 million euros ($472 million).
- In China, Foreign Films Meet a Powerful Gatekeeper (chinadailymail.com)
- News Corp to acquire 20 percent of Chinese film distributor (chinadailymail.com)
- China’s Wanda Group Agrees To Pay $2.6B For AMC Entertainment (deadline.com)
Categories: Media & Entertainment