Odeon Cinema [Photo: tunbridgewells.so]
Just months after grabbing a chunk of the U.S. movie-theater market, China's Dalian Wanda Group Corp. is moving toward becoming a global power in film exhibition, holding talks to purchase a European chain.
The talks follow Wanda's $2.6 billion purchase last year of the second-largest U.S. chain, AMC Entertainment Holdings Inc., which has nearly 5,000 screens at 344 locations in the U.S. and Canada.
A Wanda spokesman said the conglomerate has held talks to buy a European chain but declined to provide further details.
People familiar with the situation said the conglomerate has shown interest in at least two of the continent's largest chains, Odeon & UCI Cinemas Holdings Ltd. and Vue Entertainment Ltd., both based in the U.K. and with thousands of screens in multiple countries. There are other European chains that Wanda could target as well.
In addition to AMC, Wanda operates 1,000 screens in China, the world's second-largest movie market, and is aiming to expand to 2,000 by 2015, Chairman Wang Jianlin said last year.
Acquiring a big chain in Europe could make Wanda a major player in both ends of the film business; Mr. Wang has said he wants to invest in making movies in China and elsewhere. Wanda representatives have had talks with Hollywood studios about co-financing a slate of U.S. productions, people close to the discussions said.
Owning European theaters also could give the Chinese company significant leverage when negotiating the terms under which it splits box-office revenue with Hollywood studios.
"Exhibition has tended to be a territorial business," said David Hancock, an analyst at research and consulting firm Screen Digest. "A major global chain could change the dynamics."
Studios typically negotiate with theater chains on a market-by-market basis. It wasn't clear whether Wanda would seek to make broader deals if it bought a European exhibitor. The company has made few changes in the film-buying practices at AMC since acquiring the chain.
Although countries such as China and Brazil have been growing faster, Europe remains a top movie market. Last year the U.K. and France each generated $1.7 billion of box-office revenue, putting them behind only the U.S., China and Japan, according to the Motion Picture Association of America.
Odeon & UCI boasts the continent's largest footprint, with 2,179 screens at 236 locations in seven European countries. It is owned by British private-equity firm Terra Firma Capital Partners Ltd., which combined Odeon and UCI in 2004 after paying a total €1 billion ($1.3 billion) for both.
Terra Firma, led by Chairman Guy Hands, attempted to sell Odeon & UCI in 2011. The firm is expected to put the chain up for sale again soon.
Wanda has also approached Vue Entertainment, but the British company doesn't want to sell, a person close to the discussions said. Vue has 120 theaters, with 1,150 screens, in five European countries and Taiwan.
Mr. Wang's aspirations for Wanda extend beyond the movie business. The company has a wide footprint in China, operating about 60 department stores. Mr. Wang wants to make Wanda the world's largest retailer by 2015, reaching 25 million square meters (269 million square feet), compared with 12.9 million square meters last year. Wanda also has a chain of five-star Chinese hotels and has partnerships with hotel groups such as France's Accor SA, Hilton Worldwide Inc. and Starwood Hotels & Resorts Worldwide Inc. of the U.S.
Wanda reported 141.68 billion yuan ($22.83 billion) in revenue last year, up 35% from a year earlier.
In December Wanda entered a long-term partnership with India's Reliance Group to build commercial real estate and multiplex theaters in India and the U.S.
Wanda may not be the only Chinese company seeking to buy into the European cinema market. At least two other interested parties from China have explored such an acquisition, a knowledgeable person said. Both were spurred by Wanda's acquisition of AMC, the person said.