by Staff Writers
Beijing (AFP) May 21, 2012
Wanda, a property firm owned by one of China's richest men, said Monday it would buy US cinema chain AMC Entertainment for $2.6 billion, in a sign of China's growing clout in the entertainment business.
The deal, which Wanda said would create the world's largest cinema owner by revenue, gives the Chinese company access to the US movie market, the world's largest -- a key aim for China's rapidly growing movie industry.
Founded by tycoon Wang Jianlin, Wanda has business interests ranging from commercial property to film production and is China's third largest cinema operator behind two state-owned giants.
The company has moved quickly to capitalise on China's growing box-office revenues by putting cinemas in its property developments, and now owns 86 movie theatres in China, with a total of 730 screens.
"This is about Chinese money purchasing something that could allow it to gain access to a market," Teng Jimeng, professor of film at Beijing Foreign Studies University, told AFP.
"It will allow China to exercise a kind of soft power influence by gaining this kind of movie theatre chain," he said.
Wang, who was ranked as China's sixth richest person last year with a personal fortune of $7.1 billion, according to the independent Hurun Report, said the purchase would turn Wanda into a "truly global" cinema owner.
The combined movie box office for the United States and Canada was valued at $10.2 billion last year, according to the Motion Picture Association of America, although the audience is shrinking as people turn to the Internet.
China's communist leaders have said the country needs to make greater use of so-called "soft power" to promote the nation's values abroad.
But critics say censorship is hampering the Chinese film industry's ability to compete with Hollywood and even those films that get a strong reception in China have difficulties in cracking the bigger US market.
The high-profile "The Flowers of War," by China's most famous director Zhang Yimou, failed even to make the shortlist for best foreign-language film at the 2011 Oscars.
AMC, the second largest movie exhibitor in the United States, operates 346 multiplex theatres mostly in major US and Canadian cities with a total of 5,034 screens.
Wanda will invest a further $500 million in AMC for future initiatives, the companies said in a joint statement.
The announcement came after China's top e-commerce player Alibaba on Sunday paid $7.1 billion to buy back up to half of a 40 percent stake it sold to US struggling Internet firm Yahoo! seven years ago.
Wanda has already cooperated with another American company, Walmart, to help the US retail giant open stores in China, according to Chinese state media.
Questions were recently raised about Wang for his alleged involvement in a political scandal surrounding ousted Chongqing leader Bo Xilai, but Wanda last month denied he was being probed.
The former rising political star Bo, who was removed from his communist party posts this year, was previously party chief of the northeastern city of Dalian, where Wanda is based.
AMC's headquarters will remain in Kansas City in the US after the deal, the statement said. The firm has a handful of theatres in Asia, including Hong Kong and Japan.
It is the latest in a series of movie industry deals as Chinese and US companies seek greater access to each other's markets.
"AMC can also use Wanda to reach into the huge Chinese market, to run American films," Teng said.
DreamWorks Animation announced a Chinese joint venture to make films for the domestic market in February, while Walt Disney said in April it had joined an initiative to develop Chinese animation productions.
Disney will also co-produce and partly film Iron Man 3 in China with DMG Entertainment, as Hollywood seeks to tap into the fast-growing movie market.
Imports of foreign films to China on a revenue-sharing basis are currently limited to just 34 annually, though that was raised from 20 earlier this year.
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