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China's richest man to buy 'Godzilla' producer for US$3.5b
[BEIJING] Billionaire Wang Jianlin, Asia's richest man, is poised to become the first Chinese person to control a Hollywood film company after his flagship group agreed to buy the producer of "Jurassic World" in a US$3.5 billion deal.
Mr Wang's Dalian Wanda Group Co will buy Burbank, California- based Legendary Entertainment for its intellectual property rights and to help China have a bigger say in the global film industry, the tycoon said in briefing on Tuesday in Beijing.
The producer of the "Dark Knight" Batman trilogy and "Godzilla" paves the way for China to broaden its influence over US mainstream films beyond cameos of Chinese actors. For Mr Wang, the deal is the latest example underscoring his ambitions to expand a burgeoning entertainment empire that owns the second- largest US movie-theater chain and is building the world's biggest studio-plus-theme park. Mr Wang's backing gives Legendary, led by founder Thomas Tull, access to funds needed to churn out movies such as sequels to the "Pacific Rim" and "Godzilla" franchises. In 2014, Legendary raised US$250 million in equity from Japan's SoftBank Group Corp and last year, people familiar with the matter said the company was in talks to borrow as much as US$700 million. Films associated with Legendary have grossed more than YS$10 billion at the worldwide box office, according to the company.
Tull has been seeking to expand in Asia with Legendary East and in 2013 signed an agreement with China Film Co to jointly produce large-scale films for global audiences, such as "The Great Wall," which will star Matt Damon.
Wanda started building cinemas about a decade ago in a foray into a culture industry that Mr Wang said has "no ceiling" on brand influence and profitability. Last year, the Chinese group backed its first US production, Weinstein Co's "Southpaw." Legendary will join Mr Wang's growing global entertainment portfolio that already includes AMC Entertainment Holdings Inc, Infront Sports & Media AG and a stake in Spain's Club Atletico de Madrid soccer team. In 2014, Wanda bought land in Beverly Hills, calling the US$1.2 billion complex it plans to erect there its "first important step into Hollywood." In China, Wang's entertainment business spans from cinemas to film production and theme parks as analysts predict the country will overtake the US as the world's largest box office in the coming years. The business saw sales rise 46 per cent to 51.3 billion yuan (S$11.2 billion) in 2015, outpacing the group's overall revenue growth of 19 per cent.
While the growth of the entertainment business may have stood out recently, Mr Wang's Wanda Group is a vast diversified empire with 634 billion yuan in assets and 290.2 billion yuan in revenue, with the biggest business being real estate.
Hollywood has already attracted investment from China in its films and production companies but hadn't ceded control of any major producer. Alibaba Group Holding Ltd invested in its first US blockbuster with "Mission Impossible: Rogue Nation," while film production companies STX Entertainment and Studio 8 attracted funding from Hony Capital and Fosun Group.