CJ CGV seeks expansion with M&As
Bret Kim, CJ CGV’s executive vice president of the global division team, speaks during an interview at his office in Sangam, northwestern Seoul, on Aug. 12. He said the company sees ample growth potential in developing nations in Southeast Asia, the Middle East, Eastern Europe and Latin America. / Courtesy of CJ CGV
Cinema chain will open 20 multiplexes in China every year
By Park Si-soo
CJ CGV looks to expand its global presence with small- and medium-sized mergers and acquisitions (M&As) or strategic partnerships, said the multiplex chain’s chief strategist for overseas business.
The multiplex affiliate of Seoul-based CJ Group pays great attention to developing nations in Southeast Asia, the Middle East, Eastern Europe and Latin America. The company also tries to secure a bigger foothold in advanced movie markets such as the United States and Western Europe along with the launch of differentiated services, believing that this will help lift the firm’s international profile.
CJ CGV has 221 theaters containing a total of 1,637 screens in six countries as of early September ― Korea with 971 screens, China with 381, Vietnam with 166, Indonesia with 207, Myanmar with nine and the U.S. with three. It will make inroads into Malaysia during the middle of next year by establishing a joint venture with a Malaysian shopping mall developer.
“Our highest priority countries are growing countries…developing countries rather than OECD countries,” said Bret Kim, executive vice president of the global division team, during a recent interview with The Korea Times at CJ CGV’s head office in Sangam, northern Seoul. “We see big potential in the Middle East, Eastern Europe, Latin America, Southeast Asia, especially India.”
He said the company will establish its business foothold in these countries through M&As or by establishing joint ventures with local companies.
Kim hinted that he has companies under consideration to take over, but refused to elaborate. The strategist put an emphasis on “creative partnerships,” saying he seeks “really different types of partnership both within the movie sector and outside the movie sector.”
He didn’t rule out the possibility of establishing a partnership with Netflix or other on-demand video streaming service providers, if deemed helpful to expanding CGV’s business horizon.
A graduate of the University of Pennsylvania, he previously handled many M&A deals at Standard Chartered Bank and McKinsey & Company.
Kim said that CGV will make aggressive investments in China to open more than 20 multiplexes every year in the “foreseeable future.”
“Now we are top 7 (in China) by number of screens. We want to be much more than that,” he said. “If we do that, opening sites will be faster than anybody else, even Wanda.”
CJ CGV has more than half of its overseas theaters in China. Its rapid growth there has been largely attributable to its partnership with Wanda Group, China’s biggest cinema chain that owns multiplex chains in the U.S., Australia and many other countries.
He said the company’s further growth in China will be powered by M&As.
“We are always open in China for acquisition,” he said. “China is a very fragmented market. Wanda is No.1 with roughly 15 percent of the market share. No.2 and No.3 have roughly five percent. Needless to say, lower rankers have a single-digit market share. In this climate, I think consolidation will happen in the future.”
CGV’s growth in the U.S. will be slower than in China, he said, adding the firm will try to have a “reasonable presence” there through small- and medium-sized acquisitions.