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.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS