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 At a news conference in Beijing on Tuesday, Wanda Chairman
Wang Jianlin said he plans to package Legendary, behind hits
like "Jurassic World", with existing movie production assets in
China and sell shares in the merged operation in an initial
public offering (IPO).
The move makes Wanda the first Chinese firm to own a major
Hollywood studio - a sign of the country's growing power in the
global movie world, industry watchers said.
The executive gave no further details on the IPO plan, but said
was acquiring Legendary Entertainment for both intellectual
property reasons and the studio's movies. A person familiar with
the matter told Reuters earlier this month a deal to secure a
majority stake in Legendary had been agreed.
"Wanda Cinema already has made tremendous development in China,
but it isn't enough," said Wang, whose personal wealth is
estimated by Forbes magazine to be about $27 billion. "Movies
are global, and our company certainly wants to add our voice to
the world film market."
The deal is Wanda's biggest overseas acquisition ever and comes
as Wang accelerates a drive to diversify a giant with 2015
revenue of $44 billion away from its core, but slowing domestic
property operations. With deals to buy into everything from
financial services to Spanish soccer club Atletico Madrid, Wanda
said on Monday revenue rose 19 percent last year.
Under the deal announced on Tuesday, Wanda said it will buy an
unspecified majority stake in Legendary. As part of the
transaction, Legendary's founder and Chief Executive Officer
Thomas Tull will continue to head up the movie maker.
Founded in Dalian, a city on China's northeast coast, and now
based in Beijing, Wanda is already the world's biggest movie
theater operator, having bought AMC Entertainment Holdings Inc,
North America's second-largest cinema chain, for $2.6 billion in
2012. It also owns Australian movie theater company Hoyt's
Group, and Wanda Cinema Line Corp, the group's domestically
listed firm, is the biggest theater operator in China.
"The deal reflects the emergence of China as the next generation
of Hollywood investors and represents a shift from Japan," said
Dan Clivner, co-managing partner and media M&A attorney at
Sidley Austin in Los Angeles.
Wang said that the Legendary's intellectual property - with
prospects for movie tie-in promotions - would add value to its
motion picture and television production business. That would
lead to greater opportunities for joint production, he said,
while bolstering its tourism and cultural businesses also.
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HOT TICKET
China's booming movie industry, fueled by the country's growing
urban middle class, saw box office revenue increase 49 percent last
year and exceeded 40 billion yuan ($6.1 billion) for the first time,
according to data from the State Administration of Press,
Publication, Radio, Film and Television.
In 2013, Wang, flanked by Hollywood A-listers like Leonardo DiCaprio
and Nicole Kidman, broke ground on a 50 billion yuan "motion-picture
city" project in the eastern city of Qingdao, demonstrating his
ambition to build China's own version of Hollywood.
Attending Tuesday's Beijing news conference, Legendary's Tull told
reporters that he would continue to run daily operations, and that
Wang had been "insistent we run operations and continue to run
things the way we always have."
Founded in 2000, Legendary has made hits such as "The Dark Knight"
and "Man of Steel", as well as "The Hangover" film franchise.
Legendary generally provides half the financing for movies whose
budgets can run up to $200 million or more. It also has an agreement
with China Film Co, the largest and most influential film company in
China, to co-produce movies.
Both Wang and Tull dismissed concerns that Wanda's investment would
lead to censorship or alter the content of its motion pictures.
"I'm a businessman," said Wang. "I buy things to make money, so I
don't really think about government priorities. My main
consideration is commercial interest."
Tull said that Legendary had already built up a brand in China with
its blockbusters and wasn't looking to change its content.
"Frankly, we make movies that we want to see and thankfully they
work here in China."
(Editing by Kenneth Maxwell)
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