| Getting a front row seat to China’s hulking audience, DreamWorks Animation (DWA) has entered into a joint venture agreement with China Media Capital and Shanghai Media Group (a company owned by Shanghai Alliance Investment) to form Oriental DreamWorks in Shanghai. Oriental DreamWorks will engage in the development and production of original Chinese animation for distribution within China as well as around the world.
Injecting an initial investment of up to US$330 million (in cash and intellectual property) into the project, the Chinese parties will hold 55 percent whilst DWA will hold the remaining 45 percent. Shanghai based partners, David Wang and Jia Yan of Paul Hastings led the transaction on the China side, and Paul Weiss Rifkind Wharton & Garrison, Morrison & Foerster and Cravath, Swaine & Moore were amongst the team of lawyers for DWA in the US. DreamWorks is the architect behind show-stoppers like Shrek, Kung Fu Panda and Madagascar and was founded by David Geffen in 1994. Plans are for Oriental DreamWorks to become a landmark entertainment centre in Shanghai (much like its counterpart in Hollywood) with a view to tapping into the mammoth media market there later this year. China at present has its great wall up against movies from Hollywood, embargoing anything more than 20 foreign films a year. Following the tie-up however, DWA will no longer be subject to the distribution limits that would normally apply – this being the main rationale prompting the joint venture. David Wang of Paul Hastings commented that it was an ambitious project aiming to create a world-class family entertainment company based in China. He remarked that “the project will involve several businesses that are highly regulated. But the combination of DreamWorks’ creativity and global network and the Chinese partners’ expertise in investment, operations, media and entertainment management and high-technology R&D in China, gives this project a unique advantage to compete with the global media and entertainment players.” |
