China’s Wanda Group buys AMC Entertainment
China’s Wanda Group has signed an agreement with AMC Entertainment Holdings to buy out 100% of the US entertainment group for $2.6bn.
Wanda will invest another $500m over time on the operation of AMC, according to Wanda Group chairman Wang Jianlin.
The agreement was signed and announced today (May 21). The deal marks the largest merger of a Chinese enterprise in the US, also the largest overseas merger of China’s cultural industry.
According to Wanda Group, the deal has been in negotiation since early 2010 and was approved by the National Committee of Development and Reform in March this year. Following the signing of the agreement, both companies will proceed on related regulatory approvals from the US and China
“We share with AMC a passion for the growth of the worldwide movie industry,” said Wanda Group chairman Wang Jianlin in a statement.
“With Wanda as its partner, AMC will continue to seek out new ways to expand and invest in the movie-going experience,” said AMC CEO and president Gerry Lopez.
Both Wang and Lopez said the transaction will not affect the staff of AMC. “The management and operational team of AMC will remain the same,” Wang said.
Previously, market analysts predicted that Wanda’s ownership of AMC would help it to promote its film productions in the North America market. Wang Jianlin said “we did not talk about this issue in the agreement,” responding to Chinese press questions.
Wang also said the merger is not related to Wanda’s bid for a permit to distribute foreign films in China. “Our agreement with AMC did not include any issues on film distribution,” Wang said. He also said Wanda has indeed applied for a permit to distribute imported films, which is now being reviewed. Currently in China, only two state-owned companies are allowed to distribute foreign films in China.