China Draws Attention

When you take the kids or nieces to see Kung Fu Panda 3 in a few years look for the "Made in China" label.

DreamWorks Animation (NYSE: DWA  ) unveiled an ambitious foray into the world's most populous nation this week, creating an animation studio and entertainment district that will dramatically enhance the studio's brand in China.

A consortium of Chinese companies will hold a majority stake in the Oriental DreamWorks joint venture. That will come as welcome news to DreamWorks Animation investors wondering how the studio would bankroll the roughly $3 billion investment on its own. It won't. DreamWorks Animation will retain a 45% interest in the Shanghai project.

Unlike Disney (NYSE: DIS  ) which is building a theme park in Shanghai, this won't be a gated attraction. Many of the earlier media reports mistakenly categorized the project as a theme park. Plans for the entertainment complex include establishing the world's largest IMAX (NYSE: IMAX  ) theater alongside shops, restaurants, and hotels. The Dream Center will open in 2016, coinciding with the release of Kung Fu Panda 3.

DreamWorks Animation has already been establishing itself in China. It teamed up with Youku.com (NYSE: YOKU  ) -- the country's top video website -- to offer its computer-rendered flicks as premium streams last summer.

Animation has been a reliable export over the years. Disney knows it, and DreamWorks Animation is finding that out, too.

On with the show
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Disney. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

The Motley Fool owns shares of IMAX and Walt Disney. Motley Fool newsletter services have recommended buying shares of IMAX, Dreamworks Animation, and Walt Disney. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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