The Dalian Wanda Group on Monday confirmed its $3.5 billion acquisition of a majority stake in Thomas Tull‘s Legendary Entertainment, giving the Chinese conglomerate a potential Hollywood cornerstone as it seeks to build a global entertainment powerhouse.
“The acquisition of Legendary will make Wanda Film Holdings Company the highest revenue-generating film company in the world,” Chairman Wang Jianlin said.
The deal to buy a stake in Legendary, announced at a signing ceremony in Beijing on Monday, is the biggest foreign entertainment deal yet by a Chinese company. There have been numerous forged in the past few years, and every major Hollywood studio seems to be seeking Chinese partners.
“I am honored to be a part of the Wanda family,” said Tull, who will remain as Legendary’s chairman and CEO, and continue to be responsible for its day-to-day operations. Legendary operates TV, digital and comics divisions as well.
The acquisition gives Wanda majority ownership in a production company that sees blockbuster movies as its specialty, and its films have generated more than $12 billion in box office grosses globally since launching in 2005. Legendary has been part of the success of the “Dark Knight” trilogy and “Godzilla” at Warner Bros., and had a stake in Universal Pictures’ “Jurassic World.”
Upcoming releases include include “Warcraft,” based on Blizzard Entertainment’s video game universe, and “The Great Wall.” That one is a co-production with the China Film Group and is directed by Zhang Yimou and stars Matt Damon. It will be the largest film shot entirely in China for global distribution.
Tull and Dr. Jack Gao, who heads Wanda Film Holdings, were enthusiastic during a Q&A teleconference but offered few details about how the new company would be structured.
“There’s no road map for this kind of deal,” said Tull, “so some of it will have to worked out in the next few weeks.” He did say that Legendary would continue to make its own decisions on what films to green light and finance.
“The movies we’ve chosen so far have done pretty well, so I feel confident with that,” he said. He said the China-based Legendary East would be folded into the new company, and that its partnership with current distributor China Film Group would likely continue. He declined to say whether Wanda was acquiring all of Legendary’s equity, or whether a public offering under consideration.
Wanda already owns AMC Theaters, the second largest movie theater chain in the U.S., and the Wanda Cinema Line, the No. 1 Chinese theater chain that is valued at $19 billion in the fastest-growing movie market in the world. In 2013, Wanda announced the construction of an $8.2 billion production studio in Eastern China.
Advisors on the deal were Joshua B. Grode, a partner in Irell & Manella LLP, who advised Wanda, and Marty Willhite, chief operating officer and general counsel for Legendary Entertainment.