Lionsgate Moving to Actually Buy Summit Entertainment for $700M
Another potentially monumental Hollywood deal may actually go through to kick off the New Year. Deadline is reporting, with confirmation via The Wrap, that Lionsgate is moving to seal the deal on a $700 million purchase of Summit Entertainment, the studio that is already raking in the cash with the Twilight series and other hits like RED and 50/50. "As the merger talks between two of Hollywood's largest independent movie studios morphed into takeover talks and went down to the wire," many places reported it was about to blow up, but now it's likely to come through. Wow, this will be huge, and something I'm intrigued to see.
This entire purchase pretty much came out of nowhere late last year, when early rumors of it first hit via Bloomberg. We didn't report on it at the time, expecting it would either take forever to actually come together or would blow up before it could happen. Now it's all coming together. That $700 million that Lionsgate will be paying for Summit, beating out Colony Capital, is roughly $400 million in cash, and the rest covering most of Summit's debt. Lionsgate is getting the money to do this from a loan from JP Morgan. It's a huge deal for both and one which will bring two very experienced, powerful "smaller" studios together.
I'm kind of excited to see this actually happen as it means that Summit and Lionsgate can merge to become the major studio they both deserve to be. While I think they're both on a bit of rocky ground at the moment, each needing some fixes, maybe this is the big deal they need. Details get sketchy on how the new company will be managed, with some reports saying that Summit CEOs Patrick Wachsberger and Rob Friedman might not continue working, though others say they'll be worked into "the Lionsgate structure." This deal isn't too much of a last minute surprise, as Lionsgate & Summit have apparently been in talks before, but the negotiations broke down over price and control issues, of course. Now it seems to have been worked out.
This is definitely a major piece of news we'll keep an eye on, as the merger continues and plans get finalized. Both of these studios have a bright future and lots of exciting movies on the horizon. Lionsgate has The Hunger Games coming up in March, along with Drew Goddard's Cabin in the Woods, Simon West's The Expendables 2, Alex Garland's Dredd with Karl Urban, and Kim Jee-woon's The Last Stand. Summit has the final (thank goodness!) Twilight: Breaking Dawn this year, along with Jonathan Levine's Warm Bodies, Louis Leterrier's Now You See Me and Gavin Hood's sci-fi Ender's Game. If these two can stay on this track, it should mean great things for the both of them - or soon, the one of them.