Cineworld Group to buy US peer Regal Entertainment for $3.6 bn

Cineworld Group Plc, Britain's biggest cinema operator, yesterday struck a deal to buy its US peer Regal Entertainment Group for $3.6 billion in cash.

The announcement comes a week after both companies said that they were in talks on a possible merger. (See: British theater chain operator Cineworld in talks to buy Regal Entertainment for $3.6 bn)

Under the terms of the deal, Cineworld would pay $23 a share in cash for Regal. Shares of Regal closed on Monday at $20.73 a share.

Cineworld estimates that, following completion, the enlarged group will be able to achieve annualised pre-tax synergies of $100 million and additional annual structuring benefits of $50 million.

The deal will create a globally diversified cinema operator across 10 countries and allow Cineworld to access the attractive North American cinema market, which has the largest box office market in the world with an industry box office of greater than $10 billion in each year since 2008.

Post closing, Cineworld and Regal will have a combined 9,542 screens across the US and Europe and will become the world's second- largest theater operator after AMC Entertainment.

Commenting on the transaction, Mooky Greindinger, CEO of Cineworld, said, ''We have long had high respect for Regal and for its strong position in the largest box office market in the world and we are delighted that the Regal Directors have unanimously agreed to recommend our offer to their shareholders.''

''Regal is a great business and provides Cineworld with the optimal platform on which we can continue our growth strategy. Both companies are strongly committed to bringing a high end cinematic experience to their customers. Consolidation is an important move forward and the best practice we have successfully rolled out across Europe will be the key driver to continued success,'' he added.

Tennessee-based Regal Entertainment is the second-biggest cinema chain in the US after AMC Entertainment Holdings owned by Chinese real estate giant Dalian Wanda Group.

Regal Entertainment operates 7,315 screens in 561 theatres in 43 states along with Guam, Saipan, American Samoa and the District of Columbia.

The company operates theatres in 48 of the top 50 US designated market areas and has an annual turnover of $2.82 billion.

Cineworld Group was founded in 1995 and is now one of the leading cinema groups in Europe.

Originally a private company, it re-registered as a public company in 2006 and listed on the London Stock Exchange in 2007.

The London-based company is the second largest cinema operator in Europe with 2,115 screens across 226 sites in 9 countries.

The UK operations consist of arthouse chain Picturehouse Cinemas and multiplex chain Cineworld Cinemas with 24 and 82 cinemas respectively.

Cineworld is the second-largest cinema operator in the UK with over 800 screens, and the owner of the single largest multiplex by screens and customer base in Ireland.