The dateline on the press release reads "BEIJING, China and KANSAS CITY, Mo." That tells you everything you need to know about the transformative news that Chinese conglomerate Wanda, which runs China's largest theater chain, will acquire AMC Entertainment, America's second-largest theater chain, with 346 multiplexes and 5034 screens in major metropolitan markets.
As China's box office is growing at a more rapid rate than any other country (30% last year), it makes sense that they would put some of the cash that supports the world economy into Hollywood. In Cannes this week, Hollywood studios and producers are hustling to lure Chinese funds into their productions.
The $2.6 billion acquisition by Dalian Wanda Group Co., Ltd., China’s largest investor in cultural and entertainment activities, of AMC Entertainment Holdings Inc. will make Wanda the world’s largest cinema owner.
Wanda, a private conglomerate operating solely in China, plans to invest up to an additional $500 million in AMC over the next few years, and is retaining AMC's Kansas City-based management team and current day-to-day operations and programming.
Wanda boasts $16.7 billion in annual revenue and $35 billion in assets. The company owns commercial real estate, department stores, cultural businesses, luxury hotels, and makes tourism investments. Wanda is a film producer and exhibitor with 86 theaters and 730 screens; it also mounts large-scale stage shows and owns Chinese calligraphy and painting collections.
AMC operates 23 of the 50 highest grossing theatres in the country, including the top three. Of its 5,034 screens, 2,336 are 3-D and 128 are IMAX, making it the world’s largest operator of IMAX screens. Approximately 200-million people watched movies in AMC theatres in 2011. Privately held AMC’s ownership group includes Apollo Global Management, Bain Capital, the Carlyle Group, CCMP Capital Advisors and Spectrum Equity Investors. AMC will become a wholly owned subsidiary of Wanda.
Wang Jianlin, Chairman and President of Wanda, said:
“This acquisition will help make Wanda a truly global cinema owner, with theatres and technology that enhance the movie-going experience for audiences in the world’s two largest movie markets. Wanda has a deep commitment to investing in the entertainment business and is already the largest in this sector in China, with more than US$1.6 billion invested in cultural and entertainment activities since 2005. We share with AMC a passion for the growth of the worldwide movie industry. We look forward to partnering with AMC’s management team and employees to build on the many strengths of the company.”
Gerry Lopez, Chief Executive Officer and President of AMC, said:
“As the film and exhibition business continues its global expansion, the time has never been more opportune to welcome the enthusiastic support of our new owners. Wanda and AMC are both dedicated to providing our customers with a premier entertainment experience and state-of-the-art amenities and share corporate cultures focused on strategic growth and innovation. With Wanda as its partner, AMC will continue to seek out new ways to expand and invest in the movie-going experience.”