DLA Piper has advised ADG group, a Russian urban developer, on the establishment of a joint venture with South Korea's CJ CGV, the fifth largest multiplex theatre company in the world. Freshfields Bruckhaus Deringer advised CJ CGV on the JV, in which the ADG Group holds a 30% stake with a registered capital of USD 30 million, and CJ CGV holds all the remaining shares.
According to DLA Piper, "the transaction marks the first entry of a major foreign player into the Russian cinema market – the 14th largest cinema market in the world, making up 1.9% of the world box office in 2016. The two companies are planning to further invest more than USD 70 million in the JV to make it the leading cinema operator in Moscow. The joint venture will become an anchor tenant in ADG group's Neighborhood Centers project. The 33 cinemas will offer a choice of Russian and international films on 160 screens. In 2014, the ADG group acquired 39 outdated cinemas located in Moscow's densely populated urban areas in order to redevelop them as Neighborhood Centers – a new commercial real estate asset class, where the potential of physical locations is complemented by online infrastructure, all the essentials in a convenient and comfortable environment together with a superior customer experience, while respecting the interests of local communities."
DLA Piper advised the ADG group mainly on corporate and tax issues, including participating in negotiations and performing a due diligence investigation of the assets. The team was led by Corporate Partner Julien Hansen and included Tax Partner Igor Venediktov and Associate Tsvetan Naidenov, all in Moscow.
The Freshfields team was led by Partner Sebastian Lawson, with support from Senior Associates Evgeny Glukhov and Maria Borodina and Associate Azalia Mukminova.
