South Korean major CJ Entertainment is poised to acquire independent outfit Tube Entertainment in a deal that looks to reshape the landscape of the Korean film industry.
A formal acquisition is likely to take place by late November or early December, around the time that CJ Entertainment intends to go public.
Tube Entertainment, an integrated investment-production-distribution company headed by producer Kim Seung-bum, was formed only two years ago on the foundations of Ilshin Investment. Although this year it has achieved a 6.4% share of the crowded Korean market with 11 films released, it is understood to have sought a buyer to help alleviate its cash flow problems. These are thought to have resulted in part from its aggressive production slate.
Two of its films in post-production, 2009 Lost Memories and Resurrection Of The Little Match Girl (pictured), are among the year's most anticipated Korean pictures. But both have gone significantly over budget and placed a strain on the company's finances.
Orion Group (formerly Tongyang Group), a major player in Korea's exhibition sector, considered acquiring Tube earlier this year before backing off - apparently put off by the asking price.
CJ Entertainment hopes that this acquisition to secure a slate of 30-40 releases a year, and a solid production base within Korea. In the past, the company has worked with a variety of local production houses as well as distributing films from DreamWorks SKG of which it is a major shareholder.
"Our relationship with DreamWorks provides us with about 8 films per year," said Catherine Park, manager at CJ Entertainment's international sales department, "but this acquisition will give us a more stable source for local films."
CJ Entertainment will distribute all of Tube's films in production, as well as investing in all the films that Tube currently has in development.