China's Production House Huace Buys TV Company Croton
Acquisition is a sign of growing consolidation in Chinese business.
In the latest sign of growing consolidation in the Chinese entertainment business, the Zhejiang-based film and TV production and distribution company Huace Film & TV has bought Shanghai-based TV production and publishing company Croton Media for a combination of stock and cash worth 1.65 billion yuan ($270 million).
There have been some interesting mergers among the big private production companies in China of late, and more consolidation is expected as the sector expands.
Late last month, Huayi Brothers Media Corp bought a controlling 51 percent stake in the mobile games developer Yinhan Technology for 672 million yuan (US$109.7 million).
Among recent projects that Huace has been involved with is the $40 million two-part John Woo movie The Crossing, on which it is cooperating with Chinese studio Beijing Galloping Horse and China Film Group. The movie is produced by Woo and his long-time collaborator Terence Chang’s Lion Rock Productions.
In March, it said it was teaming up with now TV, Hong Kong’s largest quadruple-play pay-TV provider, to co-produce the TV drama Empress Wei Zifu. Huace earned a net profit of approximately 215 million yuan ($35.1 million) in 2012.
Croton engages primarily in the research, production, and distribution of films and TV programs. The company produces approximately 400 episodes of TV programs every year.
"Croton Media is very consistent with our future development and business plan, so it only took three months for us to sign the purchasing agreement," Jin Qian, deputy general manager of Huace, told the Beijing Commercial Daily.
"Compared to Huayi Brothers, who have gone into a different business, we hope that we can start from what we are good at and choose a company that has complementary advantages,” said Jin.
He said the aim was to use Croton's data analysis abilities to explore profit channels.
"Before planning to shoot a huge TV series, besides the box office and copyright, we will use data analysis to find out other profits channels and how the market situation is, how to layout and plan more accurately," said Jin.
Huace will also raise 550 million yuan ($89.8 million) in funding which will be used towards the 578.20 million yuan ($94.4 million) cash payment through a concurrent non-public stock issuance to no more than ten specifically-chosen investors.