Chinese real estate and investment conglomerate Dalian Wanda Group will be acquiring a majority stake in Legendary Entertainment. The deal is posed to start several deals between Hollywood and China.
Founder and CEO of Legendary Entertainment Thomas Tull has been wooing Wanda's chairman Wang Jialin since June, according to the website Hollywood Reporter. The purchase is said to value the U.S. company behind Godzilla and Pacific Rim, between $3 billion and $4 billion.
The acquisition is expected to offer Legendary access to better financing coupled with a strong local ally of China's highly regulated movie market. Asia's largest country is posed to take over as the world's largest movie market next year, surpassing North America.
Wang is one of China's wealthiest individuals, which is why the recent acquisition could spur an outbreak of deal making by Chinese billionaires. The deal is also seen to spark rumors between Hollywood and Jack Ma's Alibaba Group - one of China's newly emergent entertainment players.
In 2014, Jack Ma announced his vision for Alibaba of becoming 'the world's biggest entertainment company'. He also met with executives at Disney, Paramount, Lionsgate, Warner Bros, Universal and Sony to secure possible investments and distribution rights.
Rumors circulated of a possible deal with Paramount after Alibaba's investment in Mission Impossible - Rogue Nation last year. The movie made $137 million in China alone, much due to the strong marketing efforts of Alibaba.
The Wanda-Legendary deal marks another significant step into Wanda's push to become a global entertainment giant. In August 2012, he acquired AMC Entertainment, the nation's largest cinema chain, as reported by Hollywood Reporter.
Wealthy Chinese investors such as Wang and Ma have been interested in striking deals in Hollywood to make use of the country's growing box office. Ticket sales went up to 48 percent in 2015 amounting to $6.75 billion in sales.
Chinese investors are also looking to secure content to feed the uprise of local streaming services along with diversifying their holdings in markets beyond China.
At the same time, American studios see China as a great source for both capital and customers. For example, Imax raised almost $250 million from its initial public offering in Hong Kong alone with plans to expand into one of its biggest growth markets.
