Dalian Wanda Group Co.’s latest target for acquisition is very telling of China’s latest area of market growth.
According to Wang Jianlin, the company’s chairman, the Wanda Group would like to buy control of Lions Gate Entertainment Corp, an American film studio worth $4.7 billion whose productions include the hugely successful Hunger Games franchise. Wanda already controls the second largest U.S. cinema chain and has also discussed the possibility of investing in Metro-Goldwyn-Mayer, Inc., which produces the James Bond films.
Why the sudden interest in the film industry? Wang sees it as having huge growth potential in the Chinese market.
“We are shifting our group’s focus toward culture, entertainment and e-commerce,” he said in an interview with Bloomberg News. “China’s movie industry is growing a lot faster than that of the U.S.”
Wanda’s “quest to build a global movie empire” was also spurred by the recent lag in the Chinese housing market. Wang notes that the market grew at an “unhealthy, crazy” rate during the past few years and has just reached a point of new stability. The housing market is expected to grow at the same speed as the economy over the next 10 to 15 years, and property prices are set to remain stable.
The Wanda Group isn’t the only Chinese corporation with cinematic ambitions. The e-commerce giant Alibaba is looking to Hollywood to improve China’s entertainment products for the country’s 200 million middle-class people, according to founder Jack Ma. The Shanghai-based company Fosun, which invested $200 million in Jeff Robinov’s Studio 8 last June, has also shown interest in investing in Lions Gate.
Wang’s own forays into cinema date back to at least 2012, when the Wanda Group acquired AMC Entertainment for $2.6 billion including debt as part of an American expansion plan. Last August, the company announced plans to invest $1.2 billion to develop a plot of land in Beverly Hills, California for its proximity to Hollywood. Wang also has plans to acquire large European theater networks in the near future to attain his goal of controlling 20 percent of the global cinema market by 2020.
“Many people come knock at my door, but Wanda is only interested in the big players and we want control,” Wang, who has a net worth of $15.1 billion, said. “China’s movie industry is booming at unprecedented speed. Buying a well-known U.S. company will help our distribution overseas.”
image credit: the hunger games movie