Representing Next Entertainment World (NEW), Shin & Kim successfully provided advice on the deal in which Zhejiang Huace Film & TV (www.huacemedia.com), a listed Chinese company that engages in the production and distribution of dramas, TV series, advertisements and other contents within China, made an investment to buy a 15% stake in NEW.
Since its establishment as a film distributor in 2008, NEW has emerged fast in the industry after the box office hit of “Miracle in Cell No. 7,” which was distributed exclusively by NEW in 2013. NEW has grown into a contents distributor that produces and distributes a variety of content in different formats, including music albums, plays, and musicals. Zhejiang Huace Film & TV, as a comprehensive entertainment company, makes dramas, movies, and games in China, occupying a whopping 18% share of the golden time drama market.
In early July 2014, the Korean and Chinese governments signed a groundbreaking pact to expand cooperation in joint film production in order to strengthen the cooperation in the film industries of the two countries and promote the joint production of movies that can contribute to the exchanges and development of both countries’ movie industries, culture and economies. The Chinese media group’s investment in NEW was made in conjunction with such background so that Korea-China joint projects can being to grow. As the investment by Huace Film & TV is the first of its kind made by a Chinese media group in a Korean contents company, it is expected that the two parties will bring synergies to various contents-related projects in China as well as in Korea.
During this deal, the issue was, in particular, to help both parties to understand the investment environments of Korea and China, and to confirm enforceability of various provisions in the investment agreements in both countries. With regard to this matter, Shin & Kim’s M&A team and its Beijing Office were able to find a solution to address both parties’ concern, and as a result, the deal could be closed successfully within a month and a half after the negotiation began in September 2014.
Through the experience in this deal, Shin & Kim laid a foundation to engage in various M&As and investment deals of Chinese and Korean companies in contents & entertainment market.