DALIAN, China -- Dalian Wanda Group will consolidate its movie theater and film production units, aiming to improve original content and the moviegoer experience as the property developer expands in the entertainment business.
The group's Shenzhen-listed cinema operator, Wanda Film Holdings, said Monday it will buy nearly 97% of film producer Wanda Media from current shareholders for about 11.6 billion yuan ($1.76 billion). Wanda Film -- the biggest theater chain operator in China -- will pay for the transaction with about 8.9 billion yuan worth of newly issued shares and cash.
Box-office figures provide insight into trends like viewer reactions and customer demographics. Wanda will relay such data to production operations quickly to create hit titles. It also plans to update theaters based on requests from the production side.
The film market in China has been expanding along with the middle class. Box-office sales in China grew 15% to 52.3 billion yuan last year, with the market expected to surpass the world's biggest, North America, in the near future.
But cinemas are reliant on Hollywood movies -- only a few dozens of which are permitted to be shown in China per year -- to draw customers. Even though about 1,000 Chinese movies were released last year, they accounted for just half of sales.
Restrictions on the number of American movies shown in China this year and beyond were expected to be relaxed in negotiations between the two governments. But as Sino-U.S. trade frictions intensify, speculation has grown that the number will be cut. By combining the two businesses and producing more of its own films, Wanda seeks to put itself in a better position to cope with such uncertainties.