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.
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
Napoleon Osorio is proud of being the first taxi driver to have accepted payment in bitcoin in the first country in the world to make the cryptocurrency legal tender: El Salvador. He credits Salvadoran President Nayib Bukele’s decision to bank on bitcoin three years ago with changing his life. “Before I was unemployed... And now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company. Three years ago the leader of the Central American nation took a huge gamble when he put bitcoin
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
RSS