BERLIN — Ending months of speculation, the leading German multiplex operator Cinemaxx said Wednesday it would take a 10% stake in competitor chain UFA, creating Europe’s largest theater circuit.
At the same time, vet German film player Senator Film has taken a 25% stake in Cinemaxx, joining the Belgian theater operator Kinepolis and Hans Joachim Flebbe as company shareholders. The stake will come through a 10% capital increase.
Together the companies will operate 623 screens in 54 locations.
Combined, the partners generated revenues of DM500 million ($240.36 million) in 1999, reaching 30 million cinemagoers from a total of 149 million admissions in Germany.
Deal sees Cinemaxx assume responsibility for the day-to-day running of UFA and gives it an option to increase its stake in future.
Company reps said the deal would result in savings on marketing and administration, and lead to more cooperation between the groups’ cinemas.
“A close alliance makes sure we are well armed for the future,” said UFA managing director Ulrich Muller Taufershofer.
Cinemaxx said the deal increases its share of the German cinema market to 20% from 12%, with its slice of the plex biz rising by 10% to 42%.
For Senator Film, the deal provides access to 50 million cinemagoers, strengthening its hold on the European market. The future potential of two such strong partners is enormous, said Senator’s CEO Hanno Huth.
Coin raised through the capital increase will fuel further group expansion plans across Europe.
Deal is the latest in a number of alliances and mergers taking place in the fiercely competitive local market .