Beijing-based Chengtian Entertainment Group has reached a deal with Raymond Chow, chairman of Hong Kong 's Golden Harvest Entertainment, to buy his shareholding in the company.

Chengtian will pay $26m (HK$202m) in cash for a 24.78% stake and $2.6m (HK$20m) in convertible notes in Golden Harvest from Chow and related parties. Upon completion of the transaction, Chengtian will become the largest single shareholder in the company, which is listed in Hong Kong.

At a board meeting on Oct 26, the 78-year-old Chow announced his decision to resign as Golden Harvest chairman and executive director. He will remain as a consultant to the company.

Chengtian will appoint four executive directors and one non-executive director to the Golden Harvest board. The new board members include: Chengtian founder and chairman Wu Kebo; Holdrich Investment president Chow Siu Hong; Chengtian vice president and CFO Fiona Chow Sau-fong; the general manager of Chengtian's Beijing-based film production company, Wang Wei, and COO and senior executive director of Chengtian affiliate Avex Group Holdings, Takashi Araki.

Founded by Chow and Leonard Ho in 1970, Golden Harvest is one of Hong Kong 's two most legendary studios, along with the older Shaw Brothers Studios where Chow started out.

The company produced classics such as Bruce Lee's The Big Boss and Jackie Chan's Police Story and Rumble In The Bronx, but had withdrawn from production in recent years to focus on its distribution and exhibition business. It owns 33 multiplexes with 260 screens across Asia.

'With more than 30 years of history, Golden Harvest is one of the most respected names in Hong Kong 's film industry. Chengtian Entertainment is proud to become a major shareholder in Golden Harvest,' said Wu Kebo.

'I am confident that, by combining our creativity and drive with Golden Harvest's rich experience and presence and platform in the Asian film market, we will raise our group's film business to a higher level. Chengtian Entertainment and Golden Harvest are planning to produce not less than 20 films a year in the future.'

Chengtian, founded in 2004, is involved in film and TV production and distribution, online music distribution, talent management, theatre and entertainment marketing.

Japanese music giant Avex Group Holdings acquired a 20% shareholding in Chengtian last year. The acquisition of a stake in Golden Harvest fits in with Avex and Chengtian's plans to create a pan-Asian production and distribution network.

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