Wanda buys Hollywood's Legendary studio for $3.5b

Dalian Wanda Group Co announced on Jan 12 that it has acquired US film studio Legendary Entertainment for $3.5 billion (3.2 billion euros) in cash, marking China's largest cross-border cultural acquisition to date.

Thomas Tull will remain as chairman and CEO of Legendary and will continue to be responsible for its day-to-day operations.

Legendary is a leading film production company that has film, television, digital and comics divisions. The company has delivered many of the world's blockbusters, including the Batman trilogy, Inception and The Hangover.

"The acquisition of Legendary will make Wanda Film Holdings Co the highest revenue-generating film company in the world, increasing Wanda's presence in China and the US, the world's two largest markets," said Wang Jianlin, chairman of Wanda Group, at a news conference on Jan 12.

With the takeover, Wanda's businesses will encompass the full scope of film production, exhibition and distribution, thus enhancing the company's core competitiveness and amplifying its voice in the global film market, Wang added.

Wanda is also looking for purchasing opportunities in Europe, especially in Germany, Britain and France, Wang said.

"But European assets are relatively expensive right now, so we are waiting for better timing to purchase," he added.

Wanda bought AMC, the second-biggest theater chain in the United States, for more than $2.5 billion in 2012.

"Compared with the previous acquisition, the takeover of Legendary is of more symbolic importance as it involves content production," says Chen Shaofeng, vice-dean of the Institute for Cultural Industries at Peking University. "The investment return of the acquisition, however, is still a question mark."

Wang said that Wanda Group would start integrating Legendary Entertainment's and Wanda's production and distribution assets after the acquisition, going public as soon as possible. He said the choice of which capital market Wanda would use is still under consideration.

After the acquisition, Wanda will help Legendary increase its market opportunities, especially in the fast-growing China market, enabling Legendary to expedite the growth of the company.

"There is an ever-growing demand for quality entertainment content worldwide, particularly in China, and we will combine our respective strengths to bring a better entertainment experience to the world's audiences," said Tull, Legendary's chairman and CEO.

Movie industry observers expect that China will overtake the United States to become the world's largest film market, by revenue, by 2017. Last year, box office revenue in China hit a record high of 44 billion yuan ($6.7 billion; 6.1 billion euros).

Yan Dongjie contributed to this story.

huyuanyuan@chinadaily.com.cn

Tinseltown purchase a huge step toward global integration

Dalian Wanda Group Co has vaulted itself into the major leagues by acquiring a heavyweight Hollywood production company.

There have been many smaller-scale projects of cooperation between Chinese and Hollywood companies, but this is a landmark in the tango toward global integration. Wanda and Legendary Entertainment have a mutual fit that can take both to a higher plane of global competitiveness.

The acquisition was first of all a business decision, and should be viewed as such. Any cultural impact would and should be a natural corollary.

There has been unrealistic hope on the Chinese side for a business behemoth to promote Chinese culture overseas, but there has also been fear by some in the US public that the move could represent a Chinese cultural invasion.

However, a business is fundamentally profit-oriented. For a film-production company, that means telling great stories on screen that sell to the largest possible worldwide audience. Over-politicizing a business strategy could result in warped anticipation.

Over the past few years, Hollywood has been warming up to China, spicing up screen stories with Chinese actors and "friendly" portrayals of China. This is the market at work, not the result of pressures from Chinese investors. If Sony's acquisition of Columbia Pictures is any guide, who owns a studio has far less impact on what kind of movies are made than who watches them.

That said, an increasing Chinese presence in Hollywood, in whatever form, will benefit mutual understanding between China and the rest of the world.

The inclusion of Chinese content, be it a narrative detail or a character, is more likely to be free from inaccuracy. Stereotypes, both negative and positive, will be viewed as creative laziness. This falls on the shoulders of not only Wanda-owned Legendary, but on all filmmakers, in China and Hollywood, who want to reach an audience beyond their own border.

- Raymond Zhou, Film Critic and Industry Analyst

(China Daily European Weekly 01/15/2016 page25)