Cineworld Buys Regal in Cinema Blockbuster Deal
British cinema chain Cineworld is to buy its bigger American peer Regal to create the world's second-largest cinema chain, the pair announced Tuesday.
The deal, which sees Cineworld gain admission to the lucrative US market for the first time, comes as traditional cinemas face intense competition from on-demand video streaming services from the likes of Amazon and Netflix.
Cineworld will pay £2.7 billion ($3.6 billion, 3.1 billion euros), the London-listed company said in a statement.
"Regal... provides Cineworld with the optimal platform on which we can continue our growth strategy," said Cineworld chief executive Mooky Greindinger.
The new box-office giant will operate 9,542 screens in ten countries, including in Britain, Ireland, Israel and Poland.
That will make it the second biggest cinema operator by number of screens after and Chinese-owned and U.S.-based titan AMC Entertainment.
The deal is subject to shareholder approvals but already has the backing of the companies' largest investors.
Founded in 1995, Cineworld is the UK's only listed cinema business. Last year it sold more than 100 million tickets.
Cineworld shares were down 2.29 percent at £5.32 on the news that the takeover would be funded partly via the sale of shares.
"Investors in Cineworld are concerned that the... swoop for America's Regal Entertainment will be a flop rather than a box-office smash," said Russ Mould, analyst at stockbroker AJ Bell.
"The threat posed by video-on-demand services such as those delivered by Netflix cannot be taken lightly but this (takeover) move looks capable of supplementing existing growth momentum."