China firm buys AMC to form world's largest cinema chain
May 21, 2012 -- Updated 0425 GMT (1225 HKT)
Under the new U.S.-China deal, more IMAX or 3D films are being allowed into China.
- Dalian Wanda Group buys AMC in a $2.6 billion deal for the U.S. theater group
- Creates the world's largest theater chain, according to the companies
- Comes after a raft of cross-Pacific deals between Hollywood and Chinese firms
(CNN) -- China's Dalian Wanda Group and AMC Entertainment announced Monday a $2.6 billion deal to take over the U.S. theater group, forming the world's largest cinema chain, according to a new release on the deal.
The move is the latest in a raft of deals between U.S. entertainment companies and Chinese firms, linking the world's largest theater market with the world's fastest growing.
"This acquisition will help make Wanda a truly global cinema owner, with theatres and technology that enhance the movie-going experience for audiences in the world's two largest movie markets," said Wang Jianlin, chairman and president of Wanda.
Wanda, a private company that previously operated solely in China, generates $16.7 billion in annual revenue from its commercial development and entertainment businesses, the company said. The group owns 86 theaters with 730 screens in China.
"As the film and exhibition business continues its global expansion, the time has never been more opportune to welcome the enthusiastic support of our new owners," said Gerry Lopez, chief executive officer and president of AMC.
AMC operates 346 multiplex theaters, largely in North America, with a total of 5,034 screens. Headquarters of AMC, a privately held company, will remain in the Kansas City area and day-to-day operations, including the process for film programming, will remain unchanged, the release said.
In a deal last February, China agreed to increase the quota of 20 foreign films per year -- most of them from the U.S. -- to add an additional 14 IMAX or 3D films each year, and nearly doubled the cut foreign film companies can take from Chinese box office to 25%.
In April, The Walt Disney Company China, Marvel Studios and DMG Entertainment of Beijing announced a production deal in which "Iron Man 3" will be co-produced in China. That follows the February announced that a $330 million joint venture between DreamWorks Animation, China Media Capital (CMC) and two other Chinese companies to establish a China-focused family entertainment company, Oriental DreamWorks.
Last month came revelations, first reported by Reuters, that the Securities and Exchange Commission sent inquiries to 20th Century Fox, Disney and DreamWorks about whether Hollywood studios were paying bribes to get a foothold in the China theater market.
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