The United States commerce department has given a green light to the $3.5 billion move by China's Dalian Wanda group to purchase Legendary Entertainment, the leading Hollywood producer.
According to The Wrap, the deal represents the biggest China/US media tie-up in history, and was disclosed in Beijing less than a month ago by Legendary's Thomas Tull and Wanda's Wang Jianglin. However, the deal is still under scrutiny by Chinese authorities and awaits their approval as well.
In a statement on Tuesday, Wanda told the press that it was quite a fit for an acquisition to get approved by the U.S department of commerce in such a commendably short time. It also said that the swiftness reflected the positive attitude that the U.S. government has, concerning the Sino-U.S. cultural exchange.
Wanda has in the past been known for venturing into property development, but since the publicization of this deal, it is due to make its first overseas move in the entertainment arena. The company agreed to pay $2.4 billion for the AMC cinema chain back in 2012, and the move has since been followed by more Chinese groups seeking investments in Hollywood.
U.S conglomerates looking for business partners in the industry have also been eyeing on the deal primarily targeting to enter in the rapidly-expanding Chinese entertainment market. In financial terms, the deal of buying legendary is one of the biggest deals in the entertainment industry.
Even more, Wanda executives prospect that the combined company will enjoy the title of the highest revenue-generating film company in the world when the deal finally closes, Deadline reported.
The closure of the deal requires Chinese regulators, namely the ministry of commerce and the National Development and Reform Commission, to approve the deal from their end. Although the process is expected to be a relatively straightforward one, it is a critical step in the finalizing course of the deal.
On completion of the deal, Chief executive and Legendary founder Thomas Tull will remain in charge of the major operations of the firm.
Legendary has in the past enjoyed success in China with films including "Jurassic World," "Pacific Rim" and "The Dark Knight." With the deal approaching closure, both the Wanda and Legendary executives hope for more productions.
Here is a clip regarding the deal:
