January 28, 2015 / 3:01 PM / 5 years ago

China's Hunan TV to enter Hollywood in deal with Lions Gate

HONG KONG, Jan 28 (Reuters) - China’s Hunan TV & Broadcast Intermediary Co Ltd has agreed a deal with U.S. studio Lions Gate Entertainment Corp that will see the two firms invest a combined $1.5 billion in film making, marking the latest inroad by a Chinese firm into Hollywood.

Cooperation will include film production and distribution, the Hunan-based media company said on Wednesday in a Chinese language statement on the Shenzhen stock exchange.

Lions Gate, known for producing movies such as “The Hunger Games”, and Hunan TV plan to invest the $1.5 billion within three years.

The U.S. firm will also help distribute Chinese films produced by Hunan TV in overseas markets, according to the agreement.

The Hunan firm, which owns a film making unit in Hong Kong, plans to set up a unit in the United States as well to step up its presence there.

Chinese media firms have been eyeing the lucrative U.S. entertainment business over the past few years.

In 2012, Chinese conglomerate Dalian Wanda Group Co bought U.S. cinema chain AMC Entertainment Holdings Inc for $2.6 billion, including about $2 billion in assumed debt. The deal was the largest overseas acquisition by a privately-held Chinese firm and Wanda’s first investment outside China.

In December, Bloomberg reported Wanda, one of the biggest theatre operators in the United States, was in talks to buy a stake in Lions Gate. (Reporting by Twinnie Siu and Lee Chyen Yee; Editing by Mark Potter)

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