BEIJING-Locally based Dalian Wanda Group Co. Ltd. revealed Monday morning that it will take over the Kansas City, MO-based AMC Entertainment Holdings Inc. theater chain for $2.6 billion. The move will make Dalian Wanda the largest cinema operator in the world, with 432 locations in North America and China.
AMC was founded in Kansas City, MO, and opened the first multiplex theater in 1963. The firm went public in 1997 and went on a buying spree, acquiring General Cinema, Loews and Kerasotes Theatres. The company’s now-private ownership included Apollo Global Management, Bain Capital, the Carlyle Group, CCMP Capital Advisors and Spectrum Equity Investors.
Upon closing of the transaction, which is subject to US and Chinese regulatory bodies, AMC will become a subsidiary of Wanda. The Chinese firm said in a statement that the purchase will not result in layoffs of any of AMC’s 18,500 employees. The company said it has reached an agreement to secure the employment of AMC’s management team, and Wanda has also promised to inject another $500 million into AMC’s strategic and operating initiatives.
The deal started two years ago, according to a Wanda statement, and is a “concrete step forward by Wanda in implementing its internationalization strategy.” Along with the firm’s 86 theaters in China, the company also has its hands in film production, commercial properties, hotels, tourism and retail chains.
Gerry Lopez, CEO and president of AMC, said the company will continue to seek out ways to serve movie-goers. “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,” he said in a statement.
AMC, with 346 theaters, had $2.5 billion in revenue in 2011. The company just saw ground broken last month on its new 130,000-square-foot headquarters in Leawood, KS, in the $350 million Park Place development, created by developers Jeffrey Alpert and Melanie Mann. The movie firm had hoped to move in by April 2013, and in today’s statement, said the headquarters will “remain in the Kansas City metropolitan area.” A company spokesman tells GlobeSt.com this morning that its new headquarters plans have not changed with the takeover.
In connection with Wanda transaction, Ernst & Young LLP has served as advisor and Davis, Polk & Wardwell LLP has served as legal counsel to Wanda. Citigroup Global Markets Inc. has served as financial advisor and Weil, Gotshal & Manges LLP has served as legal counsel to AMC.
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