China’s Wanda buys Legendary Entertainment for $3.5 billion

January 12, 2016 1:33 pm

Wanda Group announced Tuesday it is buying Hollywood’s Legendary
Entertainment for US$3.5 billion in the first Chinese acquisition of a
major US film company.
Wanda, whose chairman, Wang Jianlin, is
one of ’s richest businesspeople, has expanded rapidly into the
film industry. It bought the US cinema chain AMC in 2012 and is
developing a US$8 billion studio complex in eastern China.
but cash-rich Chinese companies are on a buying spree abroad in
industries from finance to yacht building for assets that can speed
their development at home and help them expand in global markets.
its latest acquisition, Wanda’s film businesses will include a full
range of production, distribution and exhibition, Wang said in a
statement. The company, headquartered in the northeastern port city of
Dalian, also has interests in hotels, retailing and real estate.
Legendary’s productions include the Batman trilogy, Inception and The Hangover. The company says its movies have grossed more than US$12 billion worldwide.
“Wanda will help Legendary increase its market opportunities, especially in the fast-growing China market,” said Wang.

Global film, music and television companies see China and its
increasingly prosperous population of 1.3 billion potential viewers as
one of their most promising markets. Even as economic growth slows,
China’s consumer spending is expanding faster than that of the United
States and other Western markets.
Ticket sales in China, already
one of the world’s biggest movie markets, rose nearly 50 per cent last
year to 44 billion yuan (NZ$10 billion), according to Nomura. It said in
a January 7 report that total revenue is forecast to rise another 25
per cent this year.
Wang, 62, ranked as China’s richest
businessperson last year, with a net worth of US$34 billion, according
to the Hurun Report, which follows China’s wealthy.
companies invested US$11 billion in the United States over the past
year, according to data gathered by Derek Scissors, a researcher at the
American Enterprise Institute in Washington. The total since 2005 stands
at US$93.3 billion.
Many acquisitions abroad are aimed at
obtaining technology or brands to expand the buyer’s market share in
China or to capture profit from foreign goods and services flowing into
On Monday, China’s biggest chemical company, state-owned
ChemChina, announced it has bought a German maker of machinery to
process rubber and plastic, KraussMaffei, for US$1 billion (919 million
euros). It was the biggest Chinese investment to date in Germany.
August, Wanda paid US$650 million for the Florida company that operates
the Ironman triathlon race, World Triathlon Corp., and said it planned
to promote the growth of competitions in China. Last February, Wanda
paid US$1.2 billion for Swiss sports management company Infront Sports
& Media.
In contrast to Western companies that cut staff
after purchases, Chinese buyers keep employees and sometimes hire more
because they want foreign skills and experience.
Wanda said Legendary’s Thomas Tull would remain chairman and chief executive, with responsibility for day-to-day operations.
“Wanda and Legendary will create a completely new international entertainment company,” said Tull in the Wanda statement.

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