AMC buys largest European theater chain in $1.2-billion deal
AMC Entertainment is buying Europe’s biggest theater chain in a deal valued at $1.2 billion including debt, in a move that will make it the world’s largest cinema operator.
AMC, based in Leawood, Kan., said Tuesday it will acquire London-based Odeon & UCI Cinemas Group from a private equity firm to boost its business overseas. Odeon & UCI operates 242 theaters, totaling 2,236 screens.
Once the deal closes, AMC’s theater count will increase from 5,380 screens to more than 7,600.
The deal represents the latest move to consolidate the global exhibition industry. AMC agreed in March to buy Carmike Cinemas for $30 a share in a deal that was valued at $1.1 billion and included the assumption of debt.
But that proposed deal has been met with resistance from some Carmike shareholders who have agitated for a higher price. Last month, Carmike postponed a shareholder vote on the transaction, and AMC Chief Executive Adam Aron said the deal was “at considerable risk.â€
AMC said Tuesday that it “remains interested in, and committed to†closing the Carmike deal. A shareholder vote is now scheduled for Friday.
AMC is owned by Chinese property and media conglomerate Dalian Wanda Group, run by billionaire Wang Jianlin. Wanda bought AMC in 2012 for $2.6 billion. Wanda recently bought Burbank production company Legendary Entertainment for $3.5 billion.
By purchasing Odeon & UCI, AMC hopes to grow its international reach. The vast majority of its locations are in the U.S.
With Odeon & UCI, AMC will have an opportunity to expand its business of refurbishing theaters and auditoriums to better court modern audiences.
AMC will pay about $660 million in cash and stock for Odeon & UCI and assume about $540 million in debt, the companies said Tuesday. The transaction is expected to close by the end of the year and is subject to regulatory approvals.
Aron said his company will benefit in the transaction from the weakness of the British pound following the country’s vote in June to exit the European Union.
“We are encouraged that current currency rates are highly favorable to AMC with the pound falling to a three-decade low versus the dollar,†Aron said in a statement.
Shares of AMC Entertainment Holdings Inc. surged 7.3% to close at $29.80.
Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder
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UPDATES:
3:03 p.m.: This article was updated with AMC shares’ closing price.
This article was originally published at 11:49 a.m.
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