Chinese firm buys US cinema chain
BEIJING - The Associated Press
AMC and Wanda executives sign documents during a ceremony for Wanda Group to acquire AMC Entertainment. AP photoA Chinese conglomerate announced yesterday it will buy a major U.S. cinema chain, AMC Entertainment, for $2.6 billion to create the world’s biggest movie theater operator.
Dalian Wanda Group’s purchase reflects the global ambitions of a wave of cash-rich Chinese companies that are using acquisitions to speed their expansion by obtaining foreign skills and brand names.
Beijing-based Wanda said it will invest an additional $500 million to fund AMC’s development. AMC operates 346 cinemas, mostly in the United States and Canada, and says it has 23 of the 50 highest-grossing U.S. outlets.
“We support AMC becoming bigger, not only in the United States but in the global market,” said Wanda chairman Wang Jianlin at a signing ceremony for the acquisition.
The deal also reflects rising Chinese investment in U.S. companies despite disputes between the two governments over trade and political issues such as this month’s diplomatic standoff over a blind Chinese legal activist. The acquisition needs approval from regulators in China and the U.S.
Chinese companies had invested $34.8 billion in the United States by the end of 2011 in industries including auto parts, agriculture and steelmaking, according to data compiled by economist Derek Scissors at the Heritage Foundation in Washington.
Globally, overseas mergers and acquisitions by Chinese companies total $16.8 billion so far this year, up 6 percent from the same period last year, according to research firm Dealogic.
Beijing-based Wanda said AMC’s headquarters will remain in the Kansas City area and day-to-day operations will not change. It said AMC’s management would remain in place and staff numbers were not expected to be affected. The company employs some 18,500 people.
Wanda, founded in 1988 and privately owned, operates hotels, department stores, tourism and other businesses and says it had 2011 revenue of $16.7 billion. The company employs 50,000 people and its assets include 86 theaters in China.
AMC’s owners include Apollo Global Management, Bain Capital, the Carlyle Group, CCMP Capital Advisors and Spectrum Equity Investors.
AMC has reported losses for the past three years but its CEO, Gerry Lopez, said it has returned to profit this year due to strong ticket sales.
Wang, the Wanda chairman, said AMC’s financial problems were due to the cost of servicing high debt.
He said conditions should improve once an injection of Wanda’s cash allows it to pay off some of that.
“We are confident that after the merger, AMC will turn positive,” he said. “We have absolute confidence in the future of the company.” Wanda’s investment will allow AMC to speed up renovation of some cinemas and install more 3-D and IMAX technology, Lopez said.
Effects firm eyes Abu Dhabi studio
DUBAI - The Associated Press
A visual effects company that helped bring to life scenes in “Titanic” and the “Transformers” movies says it is partnering with a state-backed media company in Abu Dhabi to set up a studio in the oil-rich emirate.
Digital Domain Media Group said yesterday its partnership with Abu Dhabi’s state-backed twofour54 will include an animation, visual effects and motion capture studio and a media school in the Emirati capital.
It expects to begin hiring immediately and start work at the studio by early next year. Over time, DDMG plans to employ about 500 people at the site and open a 150,000 square foot (14,000 square meter) production center by the end of 2015.
Abu Dhabi’s government is providing $100 million in grants for the project.