Wanda of China set to buy more U.S. entertainment assets
Fresh on the heels of spending $2.6 billion to buy AMC Entertainment, the nation’s second-largest theater chain, Chinese conglomerate Dalian Wanda Group is poised to make more acquisitions in the U.S. entertainment industry.
Wang Jianlin, chairman of Dalian Wanda Group, said Tuesday that Wanda planned to invest $10 billion in U.S. companies in the next decade, which could include buying department stores, hotel management companies and at least one more cinema chain. In all, Wanda plans to invest as much as $30 billion worldwide in the next decade, he said.
Wanda, which owns shopping centers, luxury hotels and department stores and cinemas in China, is also exploring partnerships with U.S. production companies to finance China-U.S. co-productions, Wang said.
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“We have the will and capability to go global,” Wang said at an event in Century City to mark the closing of its acquisition of AMC. “The acquisition of AMC is the first step.”
AMC was previously owned by Apollo Investment Fund, Carlyle Group and other investors who bought the company in 2004. The sale to Wanda creates the world’s largest cinema operator and marks the largest acquisition of a U.S. company by a private Chinese buyer. The companies announced Tuesday that the transaction had formally closed after approval by regulators in both countries.
For Wanda, acquiring AMC gives it a bigger pipeline into two of the world’s largest theater markets — and more clout in negotiating with major Hollywood studios eager to expand into the burgeoning Chinese market. But it also fits part of a broader strategy by Wanda to become an “international business giant,” including a leading player on the global entertainment stage, Wang said during a news conference inside an empty AMC Century City 15 theater.
Dressed in a dark suit and speaking through a translator, Wang said he planned to meet with executives at the major studios to identify partners willing to establish a film fund or a joint venture to co-finance China-U.S. movies.
“We’re seeking to work with the most famous studios in Hollywood to produce quality films,” Wang said in an interview.
Wang reiterated that Wanda — which was founded in 1988 and currently controls assets worth $40 billion — is committed to invest $450 million in renovations and upgrades at AMC’s 4,865 screens over the next four years. Already, $50 million has been set aside to pay down the company’s debt.
“My vision is that in three or four years, the reinvestment will give AMC an edge over competitors,” Wang said.
The Chinese tycoon said there would be no push to play Chinese movies in AMC’s theaters and that there would be “no restrictions” on what types of movies are screened in the circuit, which is based in Kansas City, Mo.
“For us it will always be about what attracts an audience,” echoed AMC Chief Executive Gerry Lopez. “That focus doesn’t change at all.”
Industry analysts have predicted that Wanda’s AMC purchase could set the stage for a string of similar moves by other Chinese investors looking to diversify and raise their global profile by scooping up blue-chip American entertainment properties.
Some see parallels with the late 1980s and early 1990s, when competing Japanese companies acquired a number of prized U.S. assets, including Hollywood studios such as MCA-Universal and Columbia Pictures, and crown jewels such as New York’s Rockefeller Center and California’s Pebble Beach golf course.
“This is just the beginning of a global trend,” said Imax Corp. Chief Executive Richard Gelfond, who spoke at Tuesday’s event because of his company’s partnership with Wanda in China. “You’re going to see much more of a consolidation of the entertainment business worldwide. This will be remembered as a historic event.”
