Cineworld to become top dog in North America with £1.6bn buyout
Cineworld has unveiled plans to become the biggest cinema chain in North America by buying Canada’s largest operator.
The UK-based chain has proposed paying 2.8 million Canadian dollars (£1.6 million) for Cineplex, which takes 75% of box office sales in its home country. It will combine the business with its US arm, Regal.
The deal is expected to add 165 cinemas and 1,700 screens to Cineworld’s 9,500 screens across 786 sites.
“Cineplex is a great business. It is the number one cinema operator in Canada and is well positioned for further growth,” said Cineworld chief executive Mooky Greidinger.
“The combination of Cineplex and Regal will create the leading North American cinema operator with unrivalled scale and opportunity.”
The tie-up is set to create the biggest cinema chain in North America by the number of screens it operates.
It comes nearly two years since the company bought its US arm for around £2.4 billion.
Cineworld jumped close to the top of the world’s biggest cinema operators when it bought Regal in February 2018.
That acquisition sent shares down, and they have not recovered since. On Monday shares fell 2.1% to 201.7p.
“The acquisition of Cineplex strengthens our belief in the theatrical business, one of the most affordable out-of-home forms of entertainment,” said Mr Greidinger.
“We constantly strive to provide the best customer experience and maintain technological leadership and we are excited about Cineworld’s prospects for 2020 and beyond as we look to complete the Cineplex transaction.”
The acquisition will still need to be approved by shareholders in the two companies, expected in the middle of 2020.
Cineworld chairman Anthony Bloom said: “The board of Cineworld believes that the acquisition of Cineplex is in the interests of its shareholders as it fits squarely within our strategic acquisition objectives and is expected to be strongly earnings and cash flow accretive.”