Dalian Wanda’s AMC to pay $1.1bn for Carmike

Photo collage showing a Carmike Cinemas movie theater (left) and US cinema chain AMC Entertainment©AP/AFP

Collage showing a Carmike cinema (left) and US cinema chain AMC Entertainment

Wang Jianlin, China’s richest man, has extended his foreign acquisition spree in the entertainment industry after his US theatre group AMC bought Carmike for $ 1.1bn, in a deal that will create the largest US cinema chain.

The buyout adds to the list of US film industry assets already part or fully-owned by Mr Wang’s conglomerate Dalian Wanda, including film studio Legendary Entertainment, which Wanda bought in January for $ 3.5bn.

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Mr Wang, who served in the People’s Liberation Army for 17 years before founding Dalian Wanda in 1989, has a fortune estimated at $ 28.7bn by Forbes, placing him among the world’s top 20 richest people.

His expanding foreign holdings include property, sports and entertainment. Last month Dalian Wanda said it would help develop a €3bn leisure project on the outskirts of Paris alongside France’s Immochan, while last year Dalian Wanda bought the Ironman Triathlon franchise for $ 650m.

Mr Wang launched his foray into the US entertainment sector in 2012 with the purchase of AMC in 2012 for $ 2.6bn. Later he was linked to talks with film studios such as DreamWorks and Lions Gate, until the January announcement that he would buy a controlling stake in Legendary, creator of the Batman Trilogy.

Before Friday’s deal, Carmike was the fourth-largest cinema chain in the country, with 2,954 screens to AMC’s 5,426. Together AMC and Carmike would have more than 600 theatres in 45 states across the US, AMC said.

The total screens of the merged company surpasses Regal Entertainment’s 7,361 screens, which was previously the largest domestic distributor in the US.

“In one fell swoop this allows AMC to grow by a significant margin,” Adam Aron, AMC president and chief executive, told Variety magazine. “Our assets are highly complementary and do not overlap much with Carmike right now.”

According to the companies, AMC will acquire all of the outstanding stock of Carmike for $ 30 per share in cash — a near-20 per cent premium to Carmike’s closing stock price on Thursday. The deal will be funded through a combination of cash and debt, with the debt financing being provided by Citigroup.

The frenetic pace of dealmaking by Mr Wang has saddled his companies with so much debt that rating agencies Standard & Poor’s and Fitch downgraded the long-term credit rating of his core Hong Kong-listed business Dalian Wanda Commercial Properties. S&P now rates the company two notches above junk, Fitch one notch above.

Mr Wang raised eyebrows when he said in October that Deng Jiagui, the brother-in-law of Chinese President Xi Jinping, was previously a shareholder in his property group — a sensitive subject in China where ties between wealthy businessmen and the Communist leadership are hushed up.

However, Mr Wang, then speaking at the Harvard Business School, said Mr Deng had already sold his shares and was no longer a stakeholder.

This story has been amended since publication to reflect the fact S&P rates Dalian Wanda Commercial Properties two notches above junk

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