AMC Entertainment officially parts ways with Dalian Wanda Group

Dalian Wanda Group, the Chinese multinational conglomerate with interests in property development and cinemas, has sold all of its remaining stake in the AMC Entertainment Holdings Inc (NYSE: AMC), the world’s largest operator of movie theaters, according to the Wall Street Journal.

Shares of AMC are up almost 5 times this year in a Reddit-fueled frenzy and currently trading at around $13.5, up 12% for the day.

A short history of the two companies

Wanda bought AMC for $700 million in 2012 and took the company public in 2013 while still retaining a majority stake in AMC. 

Under the majority ownership of Wanda, AMC became the largest movie chain in the world after acquiring rivals Carmike and Odeon. 

Wanda started selling its shares in AMC in December last year and sold most of its remaining AMC shares this year, according to a regulatory filing. 

Lincoln Zhang and Hong Zeng, two of Wanda’s representatives on the theatre chain’s board, will resign from their seats within the next thirty days.

The nine-year partnership ended with Wanda almost doubling its initial investment of $700 million in AMC

Wanda Film Group, still a major player in China, will continue to partner with AMC, the largest movie chain in Europe and the U.S., to explore efficiencies through global purchasing efforts and the sharing of best practices.

The Chinese debt-fueled companies are facing increasing pressure from Beijing to pare down debt and also, limit the capital flight from China. That may have been the reason for the company to exit its position in AMC.

What AMC’s management said?

AMC CEO and President Adam Aron said, 

“Wanda has been a terrific shareholder of AMC for almost a decade. Under their ownership, AMC became the biggest movie theater operator in the world. Importantly, Wanda also has supported our reinvesting billions of dollars to upgrade and enhance our network of theatres for the benefit of moviegoers throughout the United States, Europe and the Middle East. I salute Wanda for the immensely constructive role they played in building our company, and want to express my sincerest appreciation and affection for their wise counsel and friendship.”