A Chinese conglomerate announced yesterday that it would buy major US cinema chain, AMC Entertainment Holdings, for US$2.6 billion in China’s biggest corporate takeover in the US to date.
Dalian Wanda Group Co’s (萬達集團) purchase reflects the global ambitions of a wave of cash-rich Chinese companies that are using acquisitions to speed their expansion by obtaining foreign skills and brand names.
Wanda said the deal would create the world’s biggest movie theater operator. The Beijing-based company said it would invest an additional US$500 million to fund AMC’s development.
AMC operates 346 cinemas, mostly in the US and Canada, and says it has 23 of the 50 highest-grossing US outlets.
“We support AMC becoming bigger, not only in the US, but in the global market,” Wanda chairman Wang Jianlin (王建林) said at a signing ceremony for the acquisition.
The deal reflects rising Chinese investment in US corporate assets despite disputes between the two governments over trade and -political issues such as this month’s diplomatic standoff over blind Chinese legal activist Chen Guangcheng (陳光誠).
It is the largest ever takeover of a US company by a Chinese company.
In terms of all Chinese corporate investments in the US, the deal is the third-largest, according to financial research firm Dealogic. It ranks behind investments by Beijing’s sovereign wealth fund, the China Investment Corp (中國投資公司), of US$5 billion for a minority stake in Morgan Stanley and US$3 billion in Blackstone Group LP, both in 2007.
Chinese companies had invested US$34.8 billion in the US by the end of last year in industries that include auto parts, agriculture and steelmaking, according to data compiled by economist Derek Scissors at the Heritage Foundation in Washington.
Globally, outbound mergers and acquisitions by Chinese companies total US$16.8 billion so far this year, up 6 percent from the same period last year, according to Dealogic.
Wanda said AMC’s headquarters would remain in the Kansas City area and day-to-day operations would not change. It said AMC’s management would remain in place and staff numbers were not expected to be affected. The company employs about 18,500 people.
Wanda, founded in 1988 and privately owned, operates hotels, department stores, tourism and other businesses and said it had revenue of US$16.7 billion last year. The company employs 50,000 people and its assets include 86 theaters in China.
AMC’s owners include Apollo Global Management, Bain Capital, the Carlyle Group, CCMP Capital Advisors and Spectrum Equity Investors.
AMC has reported losses for the past three years, but its chief executive Gerry Lopez said it returned to profit this year as a result of strong ticket sales.
Wang said AMC’s financial problems were caused by the cost of servicing high debt. He said conditions should improve once the injection of Wanda’s cash allows it to pay off some of that.
“We are confident that after the merger, AMC will turn positive,” he said. “We have absolute confidence in the future of the company.”
Wang said Wanda is considering more acquisitions abroad for its entertainment, hotel and retail units. He said the company might try to buy into a global hotel brand or a hotel management company, but gave no details.
“We want to be a big company, not just in China, but in the world,” he said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS