The Chinese conglomerate, Dalian Wanda Group Co., has revealed that it will be buying AMC Entertainment Holdings for more than $2 billion. The deal, which was announced on Monday, will create the largest movie theater operator in the world. In addition to the $2.6 billion required to make the deal, Dalian Wanda Group Co. will also provide another $500 million in order to fund AMC’s strategic and operative initiatives.
Although the Wanda Group is buying the company, the public shouldn’t expect much to change about the American cinema chain. The headquarters will remain in Kansas City and other features of the cinemas will also remain the same. Employees for AMC are also excited for the lack of change because the deal is not expected to have any effect on the workforce. In other words, none of the 18,500 jobs that AMC provides will be lost due to the change in ownership.
The deal has not been officially closed because the conditions still have to be reviewed and approved by both U.S. and Chinese regulators. Wanda has already gained the funds necessary to close the deal, and anticipates that the deal will go through smoothly. The conglomerate already operates many hotels, department stores, and other businesses. Even if the deal fails to be approved, the Wanda group will still have 86 theaters in China alone.
The chairman and president of Wanda, Wang Jianlin, told the New York Times that his goal was “to own theaters covering 20 percent of the world theater market by 2020.” Owning AMC, the second largest movie theater chain in the U.S. and Canada, will certainly help him reach this goal. While Wanda Group currently operates 730 screens, owning the AMC will add 5,034 screens to Jianlin’s cache. This includes over 2,000 3D screens and 128 IMAX screens.
Jianlin said he hopes that the deal will transform the company into a truly global cinema operator. He also looks “forward to helping AMC build on the success it has achieved so far.” Jianlin said he believes both his company and AMC are dedicated to improving the movie-going experience, which is why he doesn’t mind spending more than $2 billion to gain control over the theater chain. Gerry Lopez, AMC’s president and CEO, said he shares Jianlin’s sentiments and assures that AMC will continue its search for ways to improve the movie-going experience.