China’s Wanda buys Legendary Entertainment for $3.5b
Chinese conglomerate Dalian Wanda Group has bought leading Hollywood film production studio Legendary Entertainment for $3.5 billion in cash.
The transaction is the largest cross-border "cultural acquisition" by a Chinese company to date, Wanda said in a statement. It faciliates an exit for several US-based private equity investors plus Japan's SoftBank.
US-based Legendary operates in the film, television, digital and comics production businesses. It has co-produced and distributed blockbusters such as the Batman trilogy, "Inception," "The Hangover," "Jurassic World," "Pacific Rim" and "Man of Steel." Its upcoming releases "Warcraft" and "The Great Wall," which claims to be the largest film shot entirely in China, will be distributed in the global market.
To date, its film productions division - Legendary Pictures - records more than $12 billion worldwide at the box office.
Under the new ownership, Wanda will support Legendary's expansion in China. "Together, Wanda and Legendary will create a completely new international entertainment company. There is an ever growing demand for quality entertainment content worldwide, particularly in China," said Thomas Tull, Legendary's founder and CEO, who will remain in position.
In 2012, the US production studio raised $275 million in debt and equity financing to fund new projects and reduce existing debt. This included $128 million from backers including Accel Partners, Jim Breyer and Breyer Capital, IDG Capital Partners, Gordy Crawford, Tomorrow Ventures, Morgan Stanley Investment Management and Thiel Capital.
Two years ago, Legendary raised $250 million in equity from SoftBank. The two companies formed a joint venture with a view to expanding in China and India.
Already China's largest commercial property developer, Wanda wants to become a service-oriented company covering four industries: commercial property, culture, financial services and e-commerce.
The group's media portfolio spans film production, distribution and screening. Controlled by billionaire Jianlin Wang, Wanda has made several high-profile overseas acquisitions. In 2012, it bought US-based cinema chain AMC Entertainment from several PE firms for $2.6 billion and recently picked up Australia's Hoyts Group from Pacific Equity Partners (PEP).
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