Among the core assets involved in this acquisition, Daylight Entertainment is particularly noteworthy.
Recently, Shaw Brothers Holdings (00953.HK) announced that it has entered into a sale and purchase agreement with its major shareholder, CMC Inc., proposing to acquire CMC's core assets by issuing consideration shares, with a transaction value reaching 4.5765 billion Chinese yuan (approximately HK$5.098 billion).
The announcement reveals that the target businesses under CMC involved in this acquisition include leading series producer Daylight Entertainment, film investment and production company Shanghai CMC Pictures, overseas distribution business CMC Pictures, and a network of over 50 cinemas operating under the UME brand.
It is worth noting that Shaw Brothers' current market capitalization is only around 400 million yuan, while the acquisition price is nearly 12 times its market value, making it a classic "snake swallowing an elephant" merger case.
Shaw Brothers stated in the announcement that the group will use this opportunity to explore the market potential of the Greater Bay Area and global Chinese communities, striving to become a leading content production and planning institution in the Asia-Pacific region, and achieve substantial business expansion and value appreciation through the acquisition.
Among the core assets involved in this acquisition, Daylight Entertainment is particularly noteworthy. Daylight Entertainment is a leading domestic film and television series producer. Since its establishment in 2011, it has released a series of highly acclaimed works such as "Nirvana in Fire," "Ode to Joy," "Parents Love," "Like a Flowing River," "Minning Town," and "The Story of Ming Lan."
UME (Ultimate Movie Experience) was founded in 2002 as a chain cinema management company. It has been wholly owned and operated by CMC since 2017, primarily engaged in the investment and operation of high-end cinemas.
Regarding the background of the acquirer, public information shows that Shaw Brothers Holdings is a Hong Kong film and television investment holding company, registered in the Cayman Islands in 2009 and listed on the main board of The Stock Exchange of Hong Kong in 2010. The company was renamed to its current name in 2016 (previously called "Shaw Film"), primarily engaged in investment in film, series, and non-series production, while also covering artist and event management, trading, and other businesses. The Chairman of the Board is Li Ruigang. The company's predecessor was Shaw Brothers (Hong Kong) Limited, founded by Run Run Shaw in 1958, which was listed in 1971 and privatized and delisted in 2009. In 2016, CMC became the company's largest shareholder and facilitated the name change.
From the 1960s to the 1980s, Shaw Film was at its peak, producing dozens of films annually, covering genres such as martial arts, kung fu, period costumes, romance, and comedy, and launching screen superstars like Chow Yun-fat, Stephen Chow, Tony Leung Chiu-wai, and Andy Lau. Shaw Film was once known as the "Hollywood of the East."
However, in recent years, Shaw Brothers' performance has been unsatisfactory. From 2022 to 2024, the company's net profit attributable to owners was a loss of 302,000 yuan, 2.898 million yuan, and 5.779 million yuan, respectively. In the first half of 2025, the company achieved revenue of 106 million yuan, a year-on-year increase of 734.61%, and a net profit attributable to owners of 0.7 million yuan, turning a profit from a loss.
A key figure in this transaction is Li Ruigang, the current Chairman and CEO of CMC. In the eyes of outsiders, this injection of CMC's core assets into Shaw Brothers may be Li Ruigang's move to fulfill his dream of an IPO. Public reports indicate that in April 2021, he first revealed to the media that CMC might list in Hong Kong within the next year or two. However, as the overall film and television industry entered a downturn, nearly five years have passed, and CMC has yet to achieve an IPO.