AMC Acquires Carmike Cinemas for $1.1 Billion, Making It World’s Largest Theater Chain

AMC Theaters logo
Courtesy of AMC Theaters

UPDATED: AMC Entertainment has agreed to acquire Carmike Cinemas in a $1.1 billion deal that will make the exhibitor the largest theater chain in the United States and in the world.

Headquartered in Columbus, Ga., and known as “America’s hometown theatre circuit,” Carmike is the fourth-largest exhibitor in the country, with 2,954 screens to AMC’s 5,426 screens. Together AMC and Carmike would have well over 600 theater locations in 45 states across the country, including the District of Columbia.

Regal Entertainment, with 7,361 screens, was previously the largest domestic exhibitor. AMC was itself acquired in 2012 by China’s Dalian Wanda Group for $2.6 billion.

“In one fell swoop this allows AMC to grow by a significant margin,” AMC president and CEO Adam Aron said in an interview with Variety. “Our assets are highly complementary and do not overlap much with Carmike right now.”

He noted that AMC theaters tend to be more clustered in urban areas, whereas Carmike locations are more rural.  The company estimates that the merger will produce $35 million in cost synergies.

The combined company will be headquartered in Kansas City, Mo. where AMC has been based for more than nine decades. The AMC management team will oversee the company, but Aron predicted that the number of layoffs would be minimal.

“The vast majority of Carmike employees will join the AMC family,” said Aron.

The move comes following a record year for ticket sales, with the domestic market surpassing $11 billion in revenue for the first time in history. Industry-wide, however, attendance remains relatively flat, and the theater business faces challenges from the growing popularity of streaming services and video games, as well as a rise in quality television programming. AMC has moved aggressively to counter those challenges by installing recliners, expanding its menu options, and offering alcohol service at certain locations. Aron has said that improving AMC’s loyalty program is a priority and the company plans to redesign and relaunch it in the second half of this year. The AMC chief predicted that the enhanced size of the company would allow it to offer more benefits to its customers.

“There are a host of things we can do,” he said. “As we represent a larger national footprint there are more exciting things we can offer. We may get slots to movie premiere or special programming.”

Analysts have been predicting that improved box office and an increased emphasis by the entertainment industry on foreign investment would inspire consolidation on the domestic front. Carmike itself has helped in that effort by snapping up smaller chains, such as Digiplex, which it acquired in 2014.

AMC underwent a management shift in recent months. In December AMC tapped Aron, former CEO of Starwood Hotels & Resorts, to take over from Gerry Lopez, who left AMC last summer to run hotel chain Extended Stay America.

Carmike’s purchase price per screen is approximately $376,000, and represents an approximate 19.47% premium on the company’s March 3, 2016, closing stock price.

Shares of AMC were up 7.2% to $27.55, while shares of Carmike climbed 5.9% to $26.60 in after-hours trading.

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  1. Judy Kouri says:

    I have purchased AMC gift card but unfortunately it cannot be used in Virginia, which I was not aware. When will I be able to use these at the Carmike theatres.?

  2. Edmund Palmieri says:

    This is not good for film companies. There is precious little competition in exhibition anyway any more, but with the behemoth like AMC has become, they will have the upper hand in settling engagements, not to mention withholding payment of rental as pressure to negotiate a look.

  3. tom woolery says:

    My brother and I worked for AMC founder Stan Durwood–for 48 years +——-I believe he would be pleased with the direction of the company he founded—–Having worked for the Father of the modern multi-plex/mega-plex–Mr D was always/always about theatre operations/housekeeping–and the managers in the field——I owe my exhibition knowledge to Mr Durwood—truly missed!!!!!

  4. hormel says:

    AMC is no longer headquartered in Missouri… get your facts straight man!

  5. Dawn says:

    Instead of buying new theaters they should renovate the ones they have. The Brick Township NJ location is disgusting. It’s time ….. I drive 20 minutes north to go to the movies when I live in a town where we have an AMC

  6. J. says:

    So can the AMC employees in Lombard,IL get a raise? Well all employees employed at amc who’ve been there for six months and longer. 💁🏽

  7. Bill says:

    No idea how this passes antitrust muster.

  8. jake says:

    ugh, AMC has the worst concessions — the worst popcorn of all the chains.

  9. Drew says:

    AMC is headquartered in Leawood, KS…. Just a heads up

  10. cadavra says:

    Wait a minute. Last fall, Carmike bought Sundance Cinemas. So does this mean AMC will now be programming them as well? Because GHOSTBUSTERS and ICE AGE 5 could use the extra screens.

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