Europe’s biggest theatre chain will need to make room for “Wanda” on its marquees
Dalian Wanda-owned AMC Entertainment Holdings, the US theater chain acquired by the mainland property developer in 2012, announced on Tuesday that it will buy London-based Odeon & UCI Cinemas Group from a private equity firm for $1.2 billion.
Wanda’s latest cinema deal will expand the number of movie screens controlled by Wanda boss Wang Jianlin to 7,600 from 5,380, extending the Chinese billionaire’s lead as the world’s biggest cinema owner.
The buyout of the London-based firm is the most recent acquisition for Wanda’s cinema empire following its acquisition of Australian theater chain The Hoyt Group for $743 million in 2014. Wanda Chairman and Chinese billionaire Wang Jianlin’s international movie operations now span four continents in the US, Australia and Europe, as well as mainland China.
Wanda Continues to Add to Entertainment Empire
Wang Jianlin pounced on a Brexit bargain for Odeon
The conglomerate once best-known as China’s biggest commercial real estate developer is offering to buy the theatres from Terra Firma Capital Partners, a private equity firm run by investor Guy Hands, with the deal still subject to clearance from the European Commission. The acquisition would increase AMC’s operations by an additional 242 cinemas across Europe including the UK, Spain, Italy and Germany, bringing the company to 627 theaters worldwide.
The sale is expected to boost revenue at Wanda’s theatre business by about 40 percent, welcome news for the conglomerate, which saw revenues from its entertainment business rise 57 percent in the first half of 2016.
AMC CEO Adam Aron referred to the Odeon acquisition as a once-in-a-generation opportunity given the dramatic fall in the value of pound after the Brexit vote. “While there is increased uncertainty and increased risk, it is also true that the pound fell to a 30-year low,” Aron said. “And so the acquisition is considerably cheaper in US dollars.”
The deal for Odeon comes amidst prolonged negotiations by Wanda to acquire US-based Carmike Cinemas, with that proposal still facing resistance from unimpressed Carmike investors.
Theatres Play Leading Role in Wanda Diversification
Wang, who started his career as an army officer, has vowed to transform Wanda into an entertainment company reaping at least RMB 80 billion per year in revenue by 2020, with movies playing a central role in the company’s metamorphosis.
Earlier this year Wanda bought Hollywood-based Legendary Entertainment, the production firm that created the Dark Knight series of Batman films in a deal that Wang said was worth $3.5 billion. The company’s Wanda Cinema Line division, which is listed on the Shenzhen stock exchange, is China’s biggest theatre owner.
Wanda also opened its latest theme park during May with the company having set the goal of establishing 15-20 culturally themed tourism destinations on the mainland as it transform into an entertainment company reaping a planned RMB 80 billion per year in revenue by 2020,
Wang may need growth in his entertainment business as the performance of his real estate business faces headwinds.
During the period from January to June, sales at Hong Kong-listed Dalian Wanda Commercial Properties, which primarily invests in development of commercial properties on the mainland, declined 17.3 percent compared to the first six months of last year.
[…] Dalian Wanda-owned AMC Entertainment Holdings, the US theater chain acquired by the mainland property developer in 2012, announced on Tuesday that it will buy London-based Odeon & UCI Cinemas Group from a private equity firm for $1.2 billion. Read more on: http://www.mingtiandi.com […]