Wanda readies AMC cinemas for close-up
Updated: 2013-01-21 15:10
By Chen Weihua in Washington (China Daily)
Moviegoers in the United States might be unaware of last year's ownership change at AMC theaters, but an impending chain-wide upgrade featuring 3-D movies and snazzier food options could grab their attention.
As part of its $2.6 billion acquisition of AMC Entertainment Holdings Inc, completed in September, China-based Dalian Wanda Group Co has promised to spend $500 million to refurbish AMC cinemas over the next four years and reduce debt in the US company.
"AMC is in the process of updating its circuit from coast to coast through this acquisition, as well as enhancements such as our AMC Dine-In Theatres, improved sight and sound, new concession areas and options, and better seating," company spokesman Ryan Noonan says.
"All these enhancements are designed to deliver an amazing experience and get our movie-loving guests excited about coming to the theater to see their favorite films on the big screen."
Wang Jianlin, the real estate mogul who is Wanda's founder and chairman, shared his view of the spending around the time of the deal's completion.
"My vision is that in three or four years, the reinvestment will give AMC an edge over competitors," Wang says.
The acquisition, which required the approval of regulators in China and the US, makes Wanda the world's biggest operator of movie theaters. AMC had been owned since 2004 by a group of US private-equity firms, including Apollo Global Management LLC, Bain Capital LLC and Carlyle Group LP.
The cinema chain, with more than 5,000 screens, remains the largest in the US by revenue. (AMC Entertainment isn't connected to US cable television producer AMC Networks Inc.)
Unlike some other Chinese enterprises that have invested in the US, Wanda learned early on how to get the most out of an acquisition.
When Wang visited AMC's home base of Kansas City, Missouri, four months ago, he promised to donate $1.3 million to the community.
Wanda and AMC are providing 13 Kansas City-area high schools with art and educational supplies, as well as movie screenings that educators can use to supplement classroom education.
As an incentive for faculty and student achievement, the companies are also supplying many families of the 13 schools' students with free movie passes, popcorn and drinks, including for all of this year's graduates, according to Noonan. He says the giveaways are worth $1.3 million.
Columbia University professor Karl Sauvant says efforts at good corporate citizenship undertaken by Japanese companies in the US has helped improve Americans' view of investment from Japan since an initially negative reception in the 1980s.
Viking Weiqiong Tao, of the Dallas-based law firm Kane Russell Coleman & Logan, believes Chinese companies are paying more attention to the principle of corporate social responsibility.
For Wanda's Wang, the largesse isn't a first. The businessman ranks No 1 on Forbes China's 2011 list of the country's leading philanthropists and is honorary chairman of the China Charity Federation. He has pledged to donate most of his fortune to society, like Bill Gates and Warren Buffett.
Wanda issued a report on corporate social responsibility that showed the company in 2012 donated 390 million yuan ($62 million) to charity and public causes, and sponsored 761 volunteer activities with the participation of nearly 61,000 people.
Wang called the AMC deal - one of the biggest Chinese investments in the US last year - the first step in Wanda's global expansion.
He believes private companies, such as Wanda, can outperform State-owned enterprises, which have dominated Chinese direct investment abroad.
During his visit to Los Angeles, the chairman said Wanda plans to invest $30 billion in cinemas, hotels and department stores outside China, with a third of that to be allocated to US companies in the coming decade.
"We have the will and capability to go global," Wang says.
(China Daily 01/19/2013 page11)