National CineMedia, Screenvision Abandon Merger

National CineMedia and Screenvision have called off their merger in the face of opposition from the federal government.

The Department of Justice’s Antitrust Division filed suit in November to block the proposed merger of the cinema advertising networks, citing antitrust concerns.

The three largest movie circuits in the country — Regal Entertainment Group, AMC Entertainment and Cinemark Holdings — are majority owners of NCM.

The suit alleged that Regal, AMC and Cinemark exercise “significant control and influence” over NCM’s actions. The DOJ contended that the chains could block NCM from entering into contracts with independent movie theaters that contain upfront payments exceeding $1 million, an important area of competition between NCM and Screenvision.

NCM said Monday that the companies had together determined that the ongoing cost and distraction of the suit to their employees, advertisers and exhibitor partners could no longer be justified and that both companies would be better served pursuing their independent businesses as standalone companies.

“NCM has created a highly effective offering in the hyper-competitive video advertising marketplace,” said Kurt Hall, NCM’s chairman and CEO. “While I am disappointed that our shareholders and our advertising clients and exhibitor partners will not realize the benefits of a merger with Screenvision, I remain confident in our ability to continue to innovate and build our business.”

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