The company is already the largest foreign operator in India. The deal on completion would make it the fourth largest in the country.
Cinepolis is understood to be paying $77 million (INR480 million) to the Essel Group. Fun currently operates 83 screens around the country. Most are owned outright, others are operated on a franchise basis. Cinepolis has 110 screens in India and says it is seeking to grow that to 400 by 2017.
Both Cinepolis and Essel are privately-held companies and have no obligation to report business developments. The story was first reported by Business Standard, which quoted internal documents it had seen.
Essel was previously in negotiations to sell Fun to another multiplex chain INOX Leisure. INOX recently spent $30 million to buy Satyam Cineplexes instead.
The process of consolidation among Indian cinema operators may have further to run. Carnival Group, which acquired HDIL’s multiplex business, is believed to be in talks to buy Reliance Entertainment’s Big Cinemas circuit. Market leader, PVR may also be angling to buy the SPI chain in South India.