AMC Theaters Buys Competitor Carmike Cinemas for $1.1 Billion
By Burt Carey
When the new CEO of AMC Entertainment announced earlier last week that growth, either organically or through acquisitions, would be his top priority, he was paving the way to a major announcement.
Adam Aron made good on the promise March 3 by buying its competitor, Carmike Cinemas, in a deal worth $1.1 billion. The deal makes AMC the world’s largest theater chain, combining Carmike’s 600 theaters in 45 states (2,954 screens) to its own 572 theaters in 42 states (5,426 screens).
AMC is controlled by the Chinese Dalian Wanda Group, which is owned by Wang Jianlin, reportedly the wealthiest man in China. AMC is based in Leawood, Kan. Dalian Wanda Group acquired AMC Entertainment for $2.6 billion in 2012 and took it public in late 2013.
The acquisition knocks Regal Cinemas, with 572 theaters and 7,369 screens in 42 states, from the No. 1 position.
“Today, I suppose you’ll know that I do not make public comments lightly,” Aron said. “When we commit to something, we intend to keep our word.”
Just last month the Dalian Wanda Group purchased Legendary Entertainment, which produced blockbusters such as “Jurassic World” and “Interstellar.”
“This is a compelling transaction that brings together two great companies with complementary strengths to create substantial value for our guests and shareholders,” Aron said in a statement. “AMC also gets to extend the reach of our innovative, guest-experience strategies to further transform the movie-going experience for millions of new guests.”
It wasn’t the first time AMC tried to buy Carmike. “Candidly, the change was a new chief executive officer at AMC,” Aron said. “These two companies have tried to combine twice before in the past four years and we’ve not been able to make it happen.”
Aron became AMC’s CEO on Jan. 4. He came to the entertainment company from Starwood Hotels and Resorts Worldwide, where as interim CEO, he brokered Starwood’s sale to Marriott International for $12.2 billion.
AMC Entertainment will pay $30 per share in cash for all outstanding shares of Carmike, which represents a premium of about 19.5 percent to Carmike’s March 3 closing price. The deal is expected to close by the end of 2016 It is subject to regulatory and Carmike’s shareholders approval.
Source: Baret News