Coca-Cola Co. said Tuesday that it has signed a definitive agreement to sell its Embassy Home Entertainment subsidiary to Nelson Entertainment Inc. for $85 million in cash and the assumption of liabilities.
As reported, the buyers include former EMI Film & Theatre Corp. Chairman Barry Spikings, who will become Embassy's chairman when the transaction is completed.
As part of the transaction, Coca-Cola and Nelson also agreed to co-finance at least 12 motion pictures over the next three years, with each company producing six. The films are expected to cost between $8 million and $15 million each, with each company spending a maximum of $69 million on production costs, according to Frank Biondi Jr., Coca-Cola's executive vice president.
$175 Million for Films
In separate interviews, both Biondi and Spikings said that after marketing costs are factored in, the companies' expenditures could total about $175 million.
Nelson Entertainment will retain the home-video rights to all 12 films, while Coca-Cola will retain the North American television rights, Biondi said.
Los Angeles-based Nelson Entertainment is a subsidiary of a Vancouver, Canada, holding company formed last year by Spikings and Richard Northcott, a 39-year-old British financier who amassed his fortune from a chain of hardware and furniture stores. In a brief interview, Northcott said he also owns Select Model Agency Ltd., a top fashion modeling agency in Britain.
The parent company, Nelson Holdings International Ltd., trades its shares publicly on the Vancouver Stock Exchange. The company said it intends to apply for the listing of its securities on the American Stock Exchange when the Embassy deal closes.