China firm buys AMC Entertainment to create cinema giant
Wanda, a property firm owned by one of China’s richest men, said Monday it would buy US cinema chain AMC Entertainment for $2.6 billion, in a sign of China’s growing clout in the entertainment business.
The deal, which Wanda said would create the world’s largest cinema owner by revenue, gives the Chinese company access to the US movie market, the world’s largest — a key aim for China’s rapidly growing movie industry.
Founded by tycoon Wang Jianlin, Wanda has business interests ranging from commercial property to film production and is China’s third largest cinema operator behind two state-owned giants.
The company has moved aggressively to capitalise on China’s growing box-office revenues by putting cinemas in its property developments, and now owns 86 movie theatres in China, with a total of 730 screens.
“This is about Chinese money purchasing something that could allow it to gain access to a market,” Teng Jimeng, professor of film at Beijing Foreign Studies University, told AFP.
“It will allow China to exercise a kind of soft power influence by gaining this kind of movie theatre chain,” he said.
Wang, who was ranked as China’s sixth richest person last year with a personal fortune of $7.1 billion, according to the independent Hurun Report, said the purchase would turn Wanda into a “truly global” cinema owner.
The combined movie box office for the United States and Canada was valued at $10.2 billion last year, according to the Motion Picture Association of America, although the audience is shrinking as people turn to the Internet.
China’s communist leaders have said the country needs to make greater use of so-called “soft power” to promote the nation’s values abroad.
But critics say censorship is hampering the Chinese film industry’s ability to compete with Hollywood and even those films that get a strong reception in China have difficulties in cracking the bigger US market.
The high-profile “The Flowers of War,” by China’s most famous director Zhang Yimou, failed even to make the shortlist for best foreign-language film at the 2011 Oscars.
Privately-held AMC, the second largest movie exhibitor in the United States, operates 346 multiplex theatres mostly located in major US and Canadian cities with a total of 5,034 screens.
Wanda will invest a further $500 million in AMC for future initiatives, the companies said in a joint statement.
AMC’s headquarters will remain in Kansas City in the US after the deal, the statement said. The firm has a handful of theatres in Asia, including Hong Kong and Japan.
It is the latest in a series of movie industry deals as Chinese and US companies seek greater access to each other’s markets.
DreamWorks Animation announced a Chinese joint venture to make films for the domestic market in February, while Walt Disney said in April it had joined an initiative to develop Chinese animation productions.
Disney will also co-produce and partly film Iron Man 3 in China with DMG Entertainment, as Hollywood seeks to tap into the Asian nation’s fast-growing movie market.
Teng said Monday’s deal could also allow greater access to the booming Chinese market for US movie makers.
“AMC can also use Wanda to reach into the huge Chinese market, to run American films,” he said.
Imports of foreign films to China on a revenue-sharing basis are currently limited to just 34 annually, though that was raised from 20 earlier this year.