Chinese firm Dalian Wanda Group, led by billionaire chairman Wang Jianlin, has agreed to acquire controlling equity stake in the US film studio Legendary Entertainment for about $3.5 billion in cash.
The deal, which was announced by the two companies at a signing ceremony in Beijing on Tuesday, represents the largest acquisition by a Chinese firm to date of a US production company, which is behind blockbuster movies like 'The Dark Knight,' 'Hangover', 'Jurassic World' and 'Godzilla' .
As part of the transaction, Legendary Entertainment's founder and chief executive officer Thomas Tull will continue to lead the movie maker.
Meanwhile, Wang—China's richest man who already has movie production assets in the country—said he is planning to merge Legendary Entertainment and his company's existing movie production assets in China and thereafter sell shares in the merged operation in an initial public offering.
He, however, did not divulge details on the IPO plans.
Wanda had began as a commercial real estate firm and has grown into a massive diversified conglomerate with holdings, including a luxury hotel, an entertainment firm and e-commerce companies.
Earlier in 2012, it had bought North America's second-largest cinema chain AMC Entertainment Holdings Inc for around $2.6 billion. The group also owns Australian movie theatre company Hoyts Group.
Besides, its domestically listed arm Wanda Cinema Line is china's biggest cinema chain.
Legendary Entertainment is an American film production company founded by Thomas Tull in 2000. In 2005, it concluded an agreement to co-produce and co-finance films with Warner Bros.
Legendary Entertainment has film (Legendary Pictures), television and digital (Legendary Television and Digital Media) and comics (Legendary Comics) divisions dedicated to owning, producing and delivering content for mainstream audiences.
Japanese telecommunications firm SoftBank Group Corp had invested around $250 million in Legendary Entertainment for a stake in October 2014, in a move that marked Softbank's president Nikesh Arora's first big move at the firm where he joined as vice chairman and CEO of SoftBank Internet and Media, Inc (SIMI) in early 2014.
The two firms also formed a joint venture to exploit Legendary Entertainment's intellectual property rights, including in television, digital, licensing and merchandising and other ancillary lines, across various over-the-top (OTT) and mobile platforms with a focus on the burgeoning China and India markets. However, nothing more was heard off from that venture for India market since then.
As part of the investment, Arora was also appointed to Legendary Entertainment's board of directors. This would also be the first exit related development after Arora became the second in command at SoftBank behind founder and CEO Masayoshi Son.
The Times had reported last week that SoftBank has also agreed to sell its stake in the company to Wanda.
Earlier in 2012, Dalian Wanda Group had signed a multi-partnership deal with Anil Ambani-led Reliance ADA Group for development of realty assets owned by two group companies. As part of the JV agreement, they agreed to develop integrated township projects in India including, but not limited to, commercial buildings and residential condos/apartments, hotels, retail space, etc.
Last year, Reliance Group merged its film and entertainment services arm Reliance Media Works with Prime Focus after delisting it from stock exchanges. In December 2014, Reliance MediaWorks sold Big Cinemas to Carnival Films and exited from the exhibitions business in India completely. These deals virtually made the Reliance-Wanda partnership a non-starter. Leave Your Comment