In a significant consolidation of movie theater holdings, AMC Entertainment Holdings Inc will acquire Carmike Cinemas Inc for about US$737 million in cash, forming the country’s largest chain, with more than 600 theaters, the companies said on Thursday.
Under the terms of the deal, AMC will pay US$30 a share, up 19 percent from Carmike’s closing price on Thursday. Including the assumption of Carmike’s debt, the transaction is valued at about US$1.1 billion.
The deal is the biggest by AMC since it returned to the public markets in a 2013 stock sale, and it represents a bold effort by AMC’s controlling investor, Wang Jianlin (王健林) of China’s Dalian Wanda Group (大連萬達集團), to consolidate the US cinema industry.
Photo: AP
Dalian Wanda agreed in January to buy Legendary Entertainment, a film production and finance company, for about US$3.5 billion. It bought AMC in 2012 for about US$2.6 billion, and is building a large commercial and residential complex in Beverly Hills, California, adjacent to the Beverly Hilton hotel, where the Golden Globes and other Hollywood events take place.
AMC, based in Leawood, Kansas, is the country’s second-biggest movie theater chain with 5,426 screens, behind the Regal Entertainment Group. It is particularly strong in large markets, including New York, Los Angeles and Chicago.
Carmike, based in Columbus, Georgia, has most of its 2,954 screens in midsize cities. The combined companies will be based in Leawood, they said.
By comparison, Regal operated 7,361 screens and 572 theaters as of year end.
AMC said the deal would increase the geographic spread of its theaters, while allowing it to trim expenses by consolidating administrative operations for the two companies. The company estimated the merger would yield about US$35 million in annual cost savings.
The deal is expected to close by the end of the year, pending approval from regulators and by Carmike shareholders.
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