China's Wanda to buy controlling stake in Hollywood studio say reports

China's Dalian Wanda is in talks to buy a controlling stake in US film studio, Legendary, thereby providing a link with a key anchor in Hollywood, say sources. Legendary Entertainment studios was valued at around $3bn-$4bn by the Financial Times.  China generates the second highest box office revenues in the world after the US. 

LOS ANGELES — The Chinese conglomerate Dalian Wanda Group, which already owns the AMC chain of multiplex cinemas, is poised to buy a majority stake in a Hollywood production company that makes blockbuster-style movies, giving the politically powerful company with close ties to the Communist Party’s ruling elite a foothold in the heart of America’s entertainment industry.

Investors in the production company, Legendary Entertainment, have agreed to sell Wanda their stakes in a deal that values Legendary at about $4 billion, according to people with knowledge of the matter, who spoke on the condition of anonymity to discuss a transaction that was not yet public. The investors cashing out of Legendary own a little more than 50 percent of the company, these people said.

The rest of Legendary will continue to be owned by its management, including Thomas Tull, a former laundromat owner who founded the production company in 2000 and turned it into a Hollywood powerhouse. Legendary’s hits include “Godzilla” and “Pacific Rim.” It has also been trying, with limited success, to develop a television division.

Industry experts say the deal makes sense for both Wanda and Legendary, which tends to produce the type of big-budget, special-effects-driven movies that Chinese audiences like. In addition to owning AMC, Wanda controls the biggest cinema chain in China, where box-office receipts are set to eclipse the North American market in coming years. Wanda, a company owned by Wang Jianlin, China’s richest man, can provide Mr. Tull with money, a growing audience and a champion in China that can get more of his films into the tightly controlled market.