Wang Jianlin, chairman of the Wanda Group, in Beijing. He is seen as one of China's most successful real estate tycoons.
BEIJING — Hollywood studios, facing steep challenges in the North American movie market, are taking more interest in China.
In addition to Asia's largest cinema network, the Wanda empire includes hotels, resorts, and a film and TV production company.
The Walt Disney Company and Marvel Studios, a division of Disney's Marvel Entertainment subsidiary, are producing “Iron Man 3” in China. News Corporation recently bought a stake in the Bona Film Group in Beijing. And an agreement with Chinese authorities will allow more American companies to distribute more movies and reap a greater share of the box office in China, the world's fastest-growing economy.
But at least one billionaire businessman is betting that the American movie market is still the ticket to international success. And he is Chinese.
Wang Jianlin, a rags-to-riches tycoon, is taking over AMC Entertainment, North America's second-largest movie theater chain behind Regal Entertainment. And he is promising to integrate it into a new, made in China, global brand called the Wanda Group.
Mr. Wang, 57, is regarded as one of the most successful Chinese real estate tycoons. His $17 billion empire includes huge commercial property developments, five-star hotels, tourist resorts, a film and television production company and Asia's largest cinema network.
Now, by paying $2.6 billion to acquire AMC, the Wanda Group is extending its reach globally. The deal, announced Sunday, is still subject to the approval of United States regulators, though there are no hints it will be blocked. The purchase signifies a new era for Mr. Wang and in China's development. Companies here are moving away from low-cost manufacturing and going abroad in search of natural resources and global consumer brands, part of an effort to upgrade the nation's economy.
In an interview at his spacious headquarters in Beijing, Mr. Wang, the Wanda chairman, said he was pondering his next international destination: Europe.
“We're already negotiating,” he said.
Wanda is a private company in a nation dominated by state-owned enterprises. But the AMC deal is closely aligned with the Chinese government's priorities, which include encouraging Chinese companies to “go global,” pushing an overhaul of Chinese media and entertainment properties and placing greater emphasis on consumer spending.
Policy makers in Beijing also want to bolster China's “soft power” capabilities to extend its cultural influence internationally, and the film industry is considered one of the most promising avenues for doing so.
But whether Wanda, a 24-year-old enterprise with little international experience, can make a success of such a big acquisition and create a global property and entertainment brand is debatable, analysts say.
“China has great entrepreneurs,” says Duncan Clark, chairman of BDA China, a Beijing-based investment advisory firm. “But the question is: How will they take these companies international? Are they going to be willing to learn and adapt?”
One of the biggest experiments in this area is being undertaken by Mr. Wang, a former army officer who has turned a tiny real estate venture into a national brand. Wanda, which started in Dalian, a northeastern city, and moved its headquarters to Wanda Plaza in Beijing, is a colossus with 183 million square feet of land under development or operation.
In 1988, Mr. Wang — who entered the army at 15, after middle school — says he left a job as a local government official in Dalian and borrowed $80,000 to start a business he now describes as a “sprinting elephant.”
Wang Yongping, founder of the China Commercial Real Estate Association, described the chairman of Wanda as usually a step ahead of other Chinese real estate barons.
“He always has a vision,” Mr. Wang, no relation, said. “When everybody was doing housing property, he jumped out to focus on commercial property. When everybody was chasing commercial property, he was eyeing culture and tourism — the industries that the government is stressing and cultivating.”
That few Chinese companies have managed to establish global brands is of little concern to Wanda's chairman. And buying a stake in a company focused on a quintessentially American experience — moviegoing — seemed hardly daunting for a man who survived the Cultural Revolution, a period of social and political madness in China.
Wanda is paying $2.6 billion for AMC Entertainment, including this theater in Los Angeles, to extend its reach globally.
“In setting goals and executing a strategy, Wanda is sophisticated,” said Mr. Wang, the Wanda chairman. “We have good systems and departments. If targets are not reached, a yellow light goes off.”
Mr. Wang usually hits his targets, he says. The company has experienced 30 percent growth in the last year, even in a down market. And he promises that by 2015 the Wanda Group will have overall revenue of about $30 billion.
Which raises the question: Why invest in the United States cinema market at a time of weakness, when box office receipts are sluggish and American film producers are looking to China?
Some analysts have suggested that Mr. Wang's acquisition of AMC was political, an effort to curry favor with Chinese leaders, who are pushing their nation to enhance its influence by exporting cultural products. Others contend that Mr. Wang is eager to establish himself as China's first global corporate chief.
“This is kind of a statement deal for him,” said an executive familiar with the Wanda-AMC talks, but not authorized to discuss them. “He's coming out of China, and this is an area he has great interest in. He kept emphasizing he just wants to learn how cinemas are operated in the U.S. It's not just about the money.”
But to pull off the deal, Wanda needed plenty of that: more than $3 billion in cash, including $500 million it has promised to invest in AMC in North America. Financing such a big deal in a tough credit environment, and with China's property market in a slump, was some feat. In the end, much of the cash came from China's big, state-controlled banks.
To ensure that the deal succeeds, Mr. Wang said he would keep AMC's management in place with long-term pay incentives, and invest heavily in renovating older American theaters in an effort to bolster revenue.
Asked whether AMC would show films that the Chinese government found offensive, such as one dealing with the contentious issue of rebellions in Tibet, Mr. Wang said he would not interfere with decisions by his management team in the United States.
He also dismissed speculation in China that his ties to Bo Xilai, the fallen Politburo leader who also got his start in Dalian, could harm the Wanda Group.
“We knew each other, and were very familiar with one another,” he said. “But it was just a working relationship. There was no personal relationship.” He said the government had not asked to investigate the group.
Throughout the interview, Mr. Wang — who spoke calmly and quietly, and occasionally twirled his thumbs — said he was focusing on targets and executing strategies, fast.
Buying a Hollywood movie studio was not planned, he said, but he would not rule it out. Hotels and American shopping malls are more likely targets, he said.
“We don't have the strategy to go global in real estate,” he said. “But for globalization and going out, we would like to buy hotels and hotel management companies. We also like department stores.”