There are conflicting reports on the future of Chinese conglomerate Dalian Wanda's $1 billion takeover of the U.S. entertainment franchise Dick Clark Productions. Graham Mackay reports.
A billion dollar deal between Hollywood and China could be dead in the water. The massive Chinese conglomerate Wanda Group has been eyeing up Dick Clark productions, the company behind the Golden Globe Awards and Miss America Pageants. But according to some reports, a proposed takeover has fallen through, and as Reuters Adam Jourdan explains, that could point to Beijing trying to stem the flow of cash being rushed out of China. "Reports have pointed to Wanda facing difficulties getting money out of the country to fund the deal and getting Beijing's approval. Now this comes amid a crack down on capital outflows and greater scrutiny on outbound deals by Chinese investors, especially ones that are deemed as being irrational," he says. Dalian Wanda is owned by China's richest man Wang Jianlin. His sprawling empire already includes US franchises AMC Cinemas and Legendary Entertainment, and if he can't push a deal through, that's a worrying sign for Chinese investors looking abroad. "If the Dick Clark deal were to fall through for Wanda and that's still a big if at this point, it will be one of the most high profile deals we've seen out of China falling by the wayside. Now recently there have been a few companies that have cited this issue of capital controls, difficulty getting approval for deals being slow down or being canceled. Now we don't know yet whether this outbound deal for Dick Clark really will end up failing, but it certainly could be a red flag that things are getting tougher for Chinese outbound investment," says Jourdan. The Wanda Group wouldn't tell Reuters whether the Dick Clark takeover is officially dead. Some U.S. lawmakers have cautioned against a deal, worried about what it could mean for China's influence over Hollywood and the American media. Wang insists his interest in the company is purely business, not politics. But in the shadow of what could be a major M&A fail, his motivation could be academic.