IMAX, the cinema operator, has announced its intention to acquire full ownership of its China subsidiary, IMAX China, in a deal worth approximately $124 million. This move is aimed at enhancing IMAX’s operational flexibility and allowing the company to expand its technology within the Chinese market. The proposed acquisition involves purchasing shares of IMAX China at HK$10 each, representing a 49% premium compared to the average closing price over the past 30 days.
Industry experts believe that IMAX’s strategic decision aligns with the growing demand for immersive experiences, both globally and particularly in China. Yuwan Hu, Vice President at Daxue Consulting, a Shanghai-based market research firm, stated that IMAX is capitalizing on this trend and leveraging its assets and expertise to position itself at the forefront of China’s evolving movie industry.
The Chinese movie market is rebounding after a challenging 2022, which was heavily impacted by COVID-19 restrictions and lockdowns. China lost its status as the world’s highest-grossing movie market during that time. However, ticket sales have seen a significant recovery in the first half of 2023, surging by 52.9% compared to the same period in the previous year. The total box office revenue reached 26.3 billion yuan ($3.67 billion). Although this figure remains 15.7% lower than the pre-pandemic levels of 2019, the recovery seems to be accelerating. In June alone, box office takings amounted to 4.13 billion yuan, more than doubling the previous year’s figures and only experiencing a minimal 0.8% decline compared to June 2019, according to data from Artisan Gateway.
IMAX expects this acquisition to have a positive impact on its earnings while enabling cost savings of approximately $2 million. Following the completion of the deal, Daniel Manwaring will continue as the CEO of IMAX China, overseeing various local business functions, including distribution, marketing, and finance. IMAX China, established in 2011, will maintain its headquarters in Shanghai and maintain offices in Beijing.
IMAX’s proposal to acquire full ownership of its China subsidiary reflects its strategic focus on capitalizing on the growing demand for immersive experiences in the Chinese movie market. As the industry recovers from the challenges of the pandemic, IMAX aims to position itself at the forefront of China’s evolving movie industry.