Chinese real estate and entertainment conglomerate Dalian Wanda Group Co. has agreed to acquire a majority stake in Legendary Entertainment. The acquisition would value the U.S. movie studio company between $3 billion and $4 billion.
The move represents Dalian Wanda's overall strategy to expand international business and become a major player in the U.S. entertainment industry.
Dalian Wanda acquired AMC Entertainment Holdings, the second-largest movie theater chain in North America, for $2.6 billion in 2012.
If completed, the deal would make Dalian Wanda the first Chinese company to own a Hollywood movie production company and move China closer to its goal to become a major player in the global film industry. It also illustrates Wanda’s broader ambitions to obtain more shares in the fast-growing entertainment industry.
Dalian Wanda will own more than half of Legendary Entertainment shares after the acquisition, with Legendary founder and Chief Executive Officer Thomas Tull and the rest of its management owning the remainder shares.
Industry experts say the deal would create synergy for both Dalian Wanda and Legendary, which tends to produce the type of big-budget, special-effects-driven movies that Chinese audiences like. In addition to owning AMC, Wanda controls the biggest cinema chain in China, where box office receipts are set to eclipse the North American market in coming years. Dalian Wanda, a company owned by China’s richest man, can provide Mr. Tull with money, a growing audience and a champion in China that can get more of his films into the tightly controlled market.