Wanda Film to Buy Wanda Media for $1.78 Billion
Dalian Wanda Group, which owns U.S. film studio Legendary Entertainment, is moving forward with its film-asset restructuring.
Wanda Film Holding Co. Ltd., the company’s cinema chain, said on Monday it will buy a 96.8% stake in the film studio Wanda Media for 11.6 billion yuan ($1.77 billion) through cash and newly issued shares.
After the deal, Wanda Group’s billionaire chairman, Wang Jianlin, will indirectly control 42% of the Shenzhen-listed unit, according to a statement (link in Chinese).
Upon completion, Wanda Film’s main businesses will be expanded to production, distribution and operation of film, television and online games, the company said.
Wanda Film suspended trading in July, when it first revealed plans to consolidate its film-related assets. Wanda Film’s will remain suspended from trading in Shenzhen, the company said.
Founded in 2009, Wanda Film is China’s largest cinema chain operator, with 516 theaters and 4,571 screens. It controlled 14% of the country’s box office market at the end of 2017.
California-based Legendary Entertainment — which Wanda Group acquired in early 2016 — was not included in the deal. Legendary was expected to be incorporated into Wanda Film, but the move was put on hold due to what Wanda said was “regulators’ demand that Legendary prove that it can make a profit before being integrated into the unit.”
In February, Wanda Group said it would introduce two investors into Wanda Film: e-commerce giant Alibaba Group Holding Ltd. and state-backed Cultural Investment Holdings Co. Ltd. Alibaba bought a 7.66% stake in Wanda Film for 4.68 billion yuan, slightly larger than Cultural Investment’s 5.11% stake.
Wanda Film’s profit rose 14% to 540 million yuan, while revenue was up 27.57% to 4.25 billion yuan, for the three months ended March 31, according to the company statement.
Contact reporter Mo Yelin (firstname.lastname@example.org)
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