Bain Capital sells AMC Theaters to Chinese

Discussion in 'Politics, Religion, Social Issues' started by MadeTheSwitch, May 21, 2012.

  1. MadeTheSwitch macrumors 6502a

    MadeTheSwitch

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    #1
    With all the posturing Romney does over Bain capital and how wonderful private-equity firms are for America and US workers, I thought it would be illuminating to call attention to Bain Capital's latest deal:

    The selling of AMC Theaters to a Chinese company. This deal would be the largest acquisition of a U.S. corporation by a Chinese buyer EVER.

    http://online.wsj.com/article/SB10001424052702304791704577418620927795172.html

    http://www.huffingtonpost.com/2012/05/21/amc-theater-wanda-group_n_1532441.html?ref=entertainment

    Can't wait to hear the Republican spin on this one.
     
  2. Mac'nCheese macrumors 68030

    Mac'nCheese

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    #2
    I bet they don't show the Dark Knight Rises. You see... because....
     
  3. Ricky Smith macrumors regular

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    #3
    Seriously an American cinema group was sold to a Chinese company? What business do they have running a theater chain?
     
  4. barkomatic macrumors 68040

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    #4
    Real estate? AMC theatres sits on some prime land in NYC and other cities I'm sure. Virgin records was bought for this reason.
     
  5. Ricky Smith macrumors regular

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    #5
    What business does a Chinese firm have owning all our real estate.
     
  6. gkarris macrumors 604

    gkarris

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    #6
    If you can't bomb them, buy them... :eek:
     
  7. Eraserhead macrumors G4

    Eraserhead

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    #7
    What business doesn't a Chinese firm have buying real estate?

    If you believe in free trade, this doesn't seem any more than yawn nothing to see here.
     
  8. MadeTheSwitch thread starter macrumors 6502a

    MadeTheSwitch

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    #8
    Yeah, I'm sure that's what someone said when the first toy or electronic item was made in China way back when....hey, it's only one item..it's free trade...it's all good. And then came another, and another, and thousands, and then millions of items. Now we are seeing the same thing with our businesses and real estate. Bit by bit, more and more, that wealth and profit will be transfered right out of the country. And you think it's a yawn and nothing to see??? :eek:

    What starts as a raindrop, becomes a river.
     
  9. CalBoy, May 22, 2012
    Last edited: May 22, 2012

    CalBoy macrumors 604

    CalBoy

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    #9
    I don't think you understand what free trade means.

    I also don't think you realize how common this sentiment is when a foreign entity enters into the domestic realm.

    Did you enjoy theme parks in the 90s less because Japanese firms bought them out? Or Hollywood studios?

    Did Budweiser suddenly change because some Belgian conglomerate purchased its owner?

    Do you think Jaffa Cakes or Flake (my personal favorite, in case anyone was curious) suddenly changed because Cadbury was bought out by Kraft?

    The capital AMC's prior owners will have can now go towards other ventures. If these Chinese buyers think they can improve the efficiency of that capital, then ultimately you and I will gain along with them.

    Think of it this way; if you started the day with $1, and then we traded and you ended up with $2, would you really complain if I also doubled my money? Aren't you still better off?
     
  10. Eraserhead macrumors G4

    Eraserhead

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    #10
    So compete - sure its going to force us to step up our games, but that's good.

    Plenty of American companies, from Apple to McDonalds to GM are doing well in China, why shouldn't the reverse also apply?
     
  11. VulchR macrumors 68020

    VulchR

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    #11
    So... I guess if they ever make Tom Clancy's The Bear and the Dragon into a movie, then AMC won't show it.....
     
  12. Eraserhead macrumors G4

    Eraserhead

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    #12
    That sounds highly unlikely.

    Certainly no more likely than a US owned chain not showing a movie critical of the US.
     
  13. VulchR macrumors 68020

    VulchR

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    #13
    You're right, the book is a bit dated now so unless they update the plot a movie sounds unlikely. :(
    You are kidding, right?
     
  14. Queso macrumors G4

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    #14
    Jaffa Cakes are made by McVities.
     
  15. iJohnHenry macrumors P6

    iJohnHenry

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    #15
    Well, they do have all this U.S. debt.

    You want them to sit on their hands, and do nothing with it?

    They are turning it into something very real, seeing as how they don't make much new land.

    The real deal, yes. ;)
     
  16. Eraserhead macrumors G4

    Eraserhead

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    #16
    Any evidence they would care?
     
  17. VulchR macrumors 68020

    VulchR

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    #17
    Well...
    [​IMG]
     
  18. iJon macrumors 604

    iJon

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    #18
    I thought the Federal Reserve holds most of the debt.

    Even if China does hold a lot of debt, they still purchased the AMC outright didn't they. If they came over and just took it, then that might leave more room for worry.

    Either way, I'm not an economist so I'm probably a bit over my head in this conversation.
     
  19. 184550 Guest

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    #19
    Then you'll hate this:

    Records Show China’s Private Link to Treasury Markets

    Mods, feel free to separate if it generates any discussion.
     
  20. iJohnHenry macrumors P6

    iJohnHenry

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    #20
    Back when I was a wee lad, people were always worried about the Red Menace invading . I always scoffed, and replied there are not enough boats it the World to achieve that feat.

    But it's happening by attrition, with complicity.

    God bless the American Consumer for giving American Business this direction.
     
  21. MadeTheSwitch thread starter macrumors 6502a

    MadeTheSwitch

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    #21
    Are we buying their real estate the way they are buying ours??? There's a big difference in setting up shop in another country vs. buying that countries assets, real estate and companies. It's like saying that renting an apartment is the same thing as being the landlord and owning the apartment building. It's not.

    Free trade shouldn't mean....hey...come in and buy all our stuff up. We'll just work for you instead. Meanwhile, you put up obstacles to us doing the same to you in your country. That's called trade imbalance, not free trade.

    For good reason. Maybe you should listen to all those voices.

    What's the end result of that? What happens as more and more of our stuff gets bought up? Ya ever put any thought into the big picture here? Or are you just going to focus on each individual deal and think it's a good thing?

    Yeah, I wasn't happy about that EITHER.

    How does transferring American wealth and American profits from an American company out of the U.S. translate into a "gain" in your eyes?

    Again, you are focusing on the individual deal, rather then the collective results. What happens when more and more profit is transfered outside the country in an unbalanced fashion? What happens when more and more assets are sold? Do the American people just become tenants in their own country at some point eventually? What is the cumulative effect of all these deals?

    It really frightens me when people such as yourself just shrug your shoulders and don't pay attention to the implications of such deals. Especially when they go one way. There's a huge imbalance between us and China. Think of it as a see-saw. One side was low (China). But now that side is coming up. What happens to the other side that had been riding high? That's right...it comes down. We're raising the standard of their living while bringing ours down. That economic growth they are having in China comes from somewhere.....us!!
     
  22. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #22
    As long as it isn't critical infrastructure I don't really care that much, if the government allowed china to buy att for instance I would be pissed. AMC is a theater though.
     
  23. CalBoy macrumors 604

    CalBoy

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    #23
    :eek:

    That's rather embarrassing considering the regular supply of McVities that finds its way into my life.

    Now I will rightly criticize China for putting up obstacles to foreign buyers, but the US has never had an obstructionist policy when it comes to foreign investment. We shouldn't erect one just to guard against some unsubstantiated paranoia.
    Should we have listened to them in the 1980s and 90s? Or the 1870s? Or the 1810s? Foreign capital is no new element to the American economy. The voices of paranoia are most often the least economically literate and ignorant of history. Why should I give them any credence this time around?
    The end result is an improvement in capital efficiency. That is good for everyone in aggregate, and there will be winners and losers along the way at the micro level.
    This requires a bit of economic background, so here's goes:

    Let's suppose for a moment that AMC returns 5% for its American stakeholders. A Chinese firm sees AMC's theaters and other assets and believes that with some investment it could transform the return into a healthier 10%. That improves the value of AMC and makes it more productive.

    At the same time, AMC's prior owners will have their capital freed to reinvest into new ventures. They wouldn't have sold their shares to the Chinese firm unless their economic position was going to be improved as a result of the sale, which means that either each share was sold at a premium or that other investments that pay more than 5% exist.

    The gain for the rest of us comes from the growth that comes from more efficient capital. If assets don't deliver a good return and people are prevented from transferring them to those who can make them more productive, our society suffers. That's why we left feudalism behind.
    That's not how economies work. It's not a zero-sum game. Like I said before, if the pie is twice as big, would you really complain if someone else has more than they did before if it means you do too?
     
  24. Eraserhead macrumors G4

    Eraserhead

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    #24
    Right, but a) it's 20 years ago and b) it's not outside of China and c) it's not conducted by a private company.

    I mean come on the Americans shot students protesting against Vietnam so their "recent" record isn't exactly whiter than white.
     
  25. Eraserhead macrumors G4

    Eraserhead

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    #25
    I would have thought so, yes.
     

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