USA: Chinese movie theater chain Wanda takes top billing with its 2.6 billion dollar (USD) acquisition of AMC theaters

Record ID: 702123

  • Title: USA: Chinese movie theater chain Wanda takes top billing with its 2.6 billion dollar (USD) acquisition of AMC theaters
  • Date: 22nd May 2012
  • Summary: LOS ANGELES, CALIFORNIA, UNITED STATES (MAY 21, 2012) (REUTERS) VARIOUS OF AMC MOVIE THEATER SIGN MOVIE THEATER ENTRANCE THEATER ENTRANCE MOVIE PATRONS LUCAS SHAW, MEDIA REPORTER FOR THE WRAP (SOUNDBITE) (English) LUCAS SHAW, MEDIA REPORTER FOR THE WRAP, SAYING: "It gives the Dalian Wanda a lot more power in the U.S. market, it is already a huge theater owner in Chi
  • Embargoed: 6th June 2012 13:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Business,International Relations,Entertainment
  • Reuters ID: LVAEALFHGZ54W2RGM2IILBGMKJZU
  • Story Text: Chinese conglomerate Dalian Wanda Group has agreed to buy AMC Entertainment for 2.6 billion dollars (USD), including debt, making it the biggest theater operator in the United States.
    The deal, the largest overseas acquisition by a privately held Chinese company, reflects the warming ties between the U.S. and Chinese movie industries after China agreed in February to open its cinemas to more American films.
    The purchase will mark Wanda's first investment outside of China and its first foray into the United States and Canada, the world's biggest film market with ticket sales of more than 10 billion.
    Chinese cinemas trailed with 2.1 billion in revenue last year.
    "It gives the Dalian Wanda a lot more power in the U.S. market," explained Lucas Shaw, the media reporter for the online entertainment site, The Wrap. "It is already a huge theater owner in China, but in the U.S. market, by acquiring the second biggest, it gives them a foothold in these two different markets. China has rapidly become the second biggest box office market behind the U.S., still far behind the U.S., but still the second biggest. So, it gives them a lot of negotiating power with the studios and distributors, as the biggest exhibitor in the world."
    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, canceled its plans to go public, according to media reports.
    Wanda, which has interests in commercial properties, luxury hotels, tourism and department stores, holds 35 billion in assets, with annual revenue reaching 16.7 billion.
    Shaw expects Wanda to provide a cash infusion into the existing AMC theaters in an effort to provide consumers with a better theater experience.
    "The key to all this is to make sure that consumers have a reason to leave there home to watch movies," said Shaw, adding that he doesn't believe ticket prices should be impacted. "With all the different offerings you have at home, whether it is on-demand, netflicks there is a growing reluctance by the consumer to go out and pay 12 or 15 dollars to see a movie. Theaters need to do everything they can to keep them coming."
    The deal also highlights the rising partnership between China and Hollywood.
    "The speed is somewhat surprising," said Shaw. "In the last year or two, you have seem a number of large co-productions, investments, Disney is opening a large theme park in China, there is a large production facility opening in China. But, I don't think it is surprising if you look at the trend at the box office where overseas in worth way more than domestic."
    AMC's management team at its Kansas City, Missouri headquarters and the company's 18,500 employees will not be affected by the deal.
    The movie chain is owned by an investment group that includes Bain Capital, CCMP Capital Advisors and Spectrum Equity Capital.
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