(FILES) This file photo taken on January 12, 2016 shows a man pushing the door at the entrance of the Chinese conglomerate Wanda Group building in Beijing. Beijing is tightening screening on Chinese companies' overseas investments, according to the government and reports, after a record-setting shopping spree raised concerns of capital flight and reckless spending. / AFP PHOTO / Fred DUFOUR
WASHINGTON: A US$1bil bid for US television rights holder Dick Clark Productions by Chinese conglomerate Wanda Group is in trouble, reports said, tripped up by restrictions Beijing imposed to slow a torrent of overseas acquisitions.
The acquisitive property-to-entertainment group announced in November it planned to buy the operator of the Golden Globes awards, in what appeared to be the latest move into Hollywood by a Chinese company.
But The Wall Street Journal, quoting sources familiar with the proposed deal, said it had stalled due to China’s curbs on foreign capital outflows.
Entertainment website The Wrap went further, quoting sources saying the acquisition was dead altogether.
Wanda, headed by one of China’s richest men, Wang Jianlin, is a commercial property developer that has diversified rapidly in recent years into entertainment and sports, partly as a buffer against Chinese real-estate volatility.
Wanda bought AMC Entertainment Holdings -- owner of US-based cinema chain AMC Theatres -- for US$2.6bil in 2012 and last year acquired Legendary Entertainment, makers of the recent “Batman” trilogy and “Jurassic World”, for US$3.5bil.
The Dick Clark Productions deal would have marked its entry into television production. When it announced the planned deal, it called it “a big step forward in expanding Wanda’s map in the entertainment industry”.
Dick Clark Productions’ eponymous founder made his name presenting “American Bandstand” for more than 30 years. The company also owns the television rights to events ranging from Miss America to the New Year countdown in New York’s Times Square.
Dick Clark Productions is owned by a company called Eldridge Industries.
The Journal quoted a person close to Eldridge as saying the company still expects the deal to close, but that China’s capital restrictions were proving an obstacle.
Chinese firms went on a multi-billion-dollar shopping spree last year, culminating in state-owned ChemChina’s pending US$43bil bid for Swiss seed giant Syngenta.
The acquisitions stoked official concern over capital flight, reckless investment, slowing domestic economic growth and a weakening yuan currency.
The government responded by blasting what it called “irrational” spending and began last year to roll out new restrictions to curb the outflow of money.
That marked an about-face after authorities had long urged private and state-owned enterprises to “go abroad” to buy foreign brands and resources in search of better returns and technological know-how.
In the wake of the curbs, China’s direct overseas investment plummeted 35.7% year-on-year in January to 53.3 billion yuan (US$7.7bil), according to official data released last week, though the Lunar New Year business slowdown may also have been a factor. - AFP
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