China's Wanda Acquiring Controlling Stake in Legendary Entertainment
The deal, which could be announced as soon as next week, values the U.S. movie studio at between $3 billion and $4 billion.
Chinese real estate and investment conglomerate Dalian Wanda Group has reached a deal to acquire a majority stake in Legendary Entertainment, sources tell The Hollywood Reporter.
The agreement puts the value of the U.S. movie studio at between $3 billion and $4 billion, and could be announced as early as next week, said a person familiar with the deal who was not authorized to speak publicly. Wanda will own just over half of Legendary, with studio founder and CEO Thomas Tull and key management owning smaller stakes. Tull and his team are expected to remain in charge of the company's operations, however.
Wanda Chairman Wang Jianlin, who is one of China's richest people, had been holding talks with Tull since June. The deal marks another big step in Wanda's push to become a global entertainment giant after he acquired AMC Entertainment, the nation's second-largest cinema chain, for $2.6 billion in August 2012.
Deal talks heated up in early December but were at first centered around Wanda taking a minority stake in Legendary. But, in recent weeks, those talks evolved to where other Legendary investors -- including Japanese telecommunications giant SoftBank Group and investment firm Waddell & Reed -- decided to sell their stakes, according to a report from Reuters citing an unnamed source. The news service was the first to report the story.
Sources tell THR that Wanda, which has been looking to acquire a studio for some time, found Legendary's slate of special-effects driven tentpoles such as Godzilla and Pacific Rim, to be very appealing. Godzilla, for example, did very well in China by grossing more than $77 million. Pacific Rim, meanwhile, grossed only $101 million in the U.S. but made almost $112 million in China. Legendary is now developing a whole cinematic universe based on Godzilla, King Kong and other monsters.
The studio's next major project is Warcraft, an effects-heavy live-action adaptation of the wildly popular World of Warcraft video game series, which commands a large, loyal following across Asia and much of the world. The film is set to be released by Universal Pictures on June 10.
The studio has also made its own inroads into China with its Legendary East division, led by producer and former head of CCA's China operations, Peter Loehr.
The division has a production deal with China's powerful state-backed studio, China Film Group. The partners' first co-production, The Great Wall, has been described as the largest film ever shot entirely in China for global distribution. Produced on a $150 million budget and directed by China's leading auteur Zhang Yimou, the fantasy-adventure film stars Matt Damon, Hong Kong's Andy Lau, and Willem Dafoe. It centers on an elite force making a last stand for humanity on China's iconic Great Wall.
Wanda has made no secret of its ambitions in international entertainment. In September 2013, the company flew Hollywood A-listers, including Leonardo DiCaprio, Nicole Kidman and Harvey Weinstein, to the city of Qingdao for the announcement of an $8.2 billion movie studio complex, which it says will be the world's largest film production lot. The studio is slated to open in the eastern Chinese port city in 2017.
Wanda's U.S. headquarters is stationed in New York City, but it is spending $1.2 billion to build a Hollywood presence on Wilshire Boulevard in Beverly Hills. The company is also understood to be cultivating a relationship with The Academy of Motion Picture Arts and Sciences, the body behind the Oscars. In 2013, Wanda donated $20 million to the Academy for its new museum. When the Academy Museum opens in early 2017, its film history gallery will be named The Wanda Gallery.
Legendary and Wanda declined to comment.