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Kinowelt takes stake in Alliance Atlantis

Companies to bow H'wood production arm

BERLIN — Marking its transition from local to global player, Germany’s leading distrib Kinowelt Medien has taken a 20% stake in Canada’s largest film and TV company, Alliance Atlantis Communications.

Kinowelt has optioned 6,276 million shares in Alliance Atlantis at a net price of DM170 million ($90 million), which will flow directly into Alliance Atlantis.

As part of the deal, the companies plan to open an L.A.-based production company in which they will jointly invest $150 million over a three-year period.

Entering the British market, Kinowelt has taken a 50% share in Alliance’s U.K. theatrical distribution arm, Alliance Atlantis Releasing.

Over three years, joint annual investments of $25 million will be plowed into Alliance Atlantis Releasing, which is active in distribution, production, home entertainment and licensing.

Kinowelt will make use of Alliance Atlantis’ world sales arm to push its existing library, while Alliance Atlantis will collaborate with Kinowelt on its own world sales venture, Kinowelt Intl., which will concentrate on Eastern Europe.

“This deal has developed out of a long working relationship,” Kinowelt co-topper Rainer Koelmel told Daily Variety. “It is a great opportunity to become a global player. It has solved the problem of how to enter the British marketplace, which we have been working on for a year, and is the perfect solution to entering the U.S. market.”

Agreement comes on the heels of Kinowelt’s announcements that it is launching into Eastern Europe in the hopes of expanding its core German business.

For Alliance Atlantis the deal comes in its first year of operations since the merger of Alliance Communications and Atlantis Communications in September, which resulted in $53 million of restructuring costs. Company says it will use the new coin to pay off existing debts and finance future projects.

The partnership will boost both companies’ expansion plans Stateside and give them a stronger foothold in the European market.

Funding indie pix

Alliance Atlantis Motion Pictures chairman Victor Loewy said the production fund will be used to finance indie U.S. pics in the $10 million range and that the new partnership will allow Alliance Atlantis to significantly increase its distribution presence in the U.K.

Loewy hinted that the U.K. distribution operation is working toward inking the same sort of long-term output deals that have powered growth for Alliance Atlantis Releasing in Canada and Kinowelt in Germany.

Deal is the second move made on North American companies in recent weeks by Teutonic outfits flush with coin raised from public listings. German film distrib Splendid acquired a stake in U.S. indie Initial in early July.

(Brendan Kelly in Montreal contributed to this story.)

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