WSJ: AMC Closes Deal to Buy Carmike Cinemas
News story originally published at WSJ.com
By Erich Schwartzel
AMC Entertainment Holdings Inc. is now officially the nation’s largest movie theater chain.
The exhibitor said Wednesday it had closed its $1.1 billion acquisition of Carmike Cinemas Inc., a tie-up that unseats Regal Entertainment Group for the No. 1 spot.
AMC, which had been the second largest exhibitor, now operates 661 theaters with 8,200 screens in the U.S. The deal was granted antitrust clearance by the Justice Department on Tuesday, in a settlement that required the companies to sell theaters in 15 markets.
Owned by China’s Dalian Wanda Group Co., AMC will operate Carmike theaters under a “multibrand” strategy that will be unveiled at the end of January, said AMC Chief Executive Adam Aron. The deal expands AMC’s footprint at a relatively healthy time for the exhibition industry. The domestic box office is close to surpassing last year’s record haul of $11.12 billion and could do so by the end of the year.
AMC will invest millions of dollars in upgrading between 50 and 100 of Carmike’s 271 locations with plush recliners that have been a boon to attendance at AMC theaters.
The AMC-Carmike tie-up faced resistance on several fronts, first from Carmike investors who thought the deal undervalued the company and then from a Washington lobbyist and some politicians who see Chinese investments in U.S. media holdings as “soft-power” plays.
Last month, AMC separately closed a $650 million deal to buy Europe’s Odeon & UCI Cinemas Group, making it the largest exhibitor in Europe and the world. AMC now operates about 900 theaters around the world, controlling about 10,000 screens.
“We’re moving at a hundred miles an hour,” said Mr. Aron.