×

U.K.’s Cineworld Poised to Buy Canada’s Cineplex in $2.1 Billion Deal

U.K.-based Cineworld is to acquire Cineplex, Canada’s leading cinema chain, in a deal that values the Toronto-listed company at $2.1 billion (C$2.8 billion) and puts Cineworld in position to become North America’s biggest exhibitor.

Cineworld said Monday that it had secured unanimous approval from its board of directors for the acquisition, and that its leading shareholder, Global City Theaters, with 28% of the shares, had also given its blessing. The move, if approved by regulators, will accelerate the consolidation of the world’s movie theater business, which has plateaued in some countries and is under pressure from the growth of streaming video.

Cineworld previously paid $3.6 billion for Regal Entertainment Group, its entry into the U.S. market last year. The company plans to combine the operations of Cineplex and Regal to create the largest exhibitor in North America. Following completion, the enlarged group would have 11,204 screens globally and a combined 8,906 screens across the U.S. and Canada.

Cineworld has signed an agreement with Cineplex in which Cineplex shareholders will receive C$34 in cash for each common share, amounting to C$2.18 billion ($1.65 billion). That price compares with the C$24.01 at which Cineplex shares ended trading on Friday. The rest of the acquisition will be financed through debt, without the issuance of new shares. That will push up Cineworld’s debt burden, but the company said that this could be brought back down to acceptable levels by the end of 2021.

Cineworld said that merging the Cineplex and Regal businesses could create $130 million of annual benefits. Half of that would come from economies of scale, while the other $65 million would come from new business initiatives, including the application of operational best practice, its subscription program and additional advertising. Cineworld estimates the cost of restructuring to be less than $20 million.

“Cineplex is a great business. It is the No. 1 cinema operator in Canada and is well-positioned for further growth,” said Cineworld CEO Mooky Greidinger. “The acquisition of Cineplex strengthens our belief in the theatrical business, one of the most affordable out-of-home forms of entertainment.”

In 2018, Canada grossed about C$1,021 million ($770 million) at the box office, with annual attendance of 98 million. Between 2014 and 2018, the country’s box office revenue and average ticket prices grew at compound annual growth rates of 1.9% and 3.5% respectively, according to Cineworld.

In 2014, Cineworld merged with European chain Cinema City International. That transaction resulted in the creation of one of the continent’s leading exhibitors.

More Film

  • My Name is Baghdad

    Reel Suspects Acquires Berlinale Generation Title 'My Name is Baghdad' (EXCLUSIVE)

    Reel Suspects has acquired international sales rights to Caru Alves de Souza’s coming-of-age tale “My Name is Baghdad,” which will world premiere at the Berlin Film Festival in the Generation 14 section. The film was produced by Manjericão Filmes and Tangerina Entretenimento. It follows a 17-year-old female skater named Baghdad who lives in a working-class [...]

  • My Salinger Year

    Berlin Film Festival to Open With Sigourney Weaver, Margaret Qualley Starrer 'My Salinger Year'

    The 70th edition of the Berlinale will open with Philippe Falardeau’s anticipated “My Salinger Year,” headlined by a powerful female duo, Sigourney Weaver and Margaret Qualley. Set in New York’s literary world in the 90’s, the coming-of-age story is based on Joanna Rakoff’s international bestseller and follows Joanna (Qualley), who leaves graduate school to pursue [...]

  • Bad Hair

    'Bad Hair': Film Review

    The year is 1989 and New Jack Swing is about to push black culture from the margins to the mainstream. The question for the black employees of Culture, the music TV station at the center of writer-director Justin Simien’s delightfully macabre horror-dramedy “Bad Hair,” is what image do they — and their white executive Grant [...]

  • Bad Hair

    Justin Simien's 'Bad Hair' is a Tribute to Exploited Black Women Everywhere, Director Says

    Deeply personal but indulgently campy, Justin Simien’s Sundance opener “Bad Hair” is a genre-blending horror show that the director said serves as a tribute to the struggles of black women. The mind behind  “Dear White People” staged the world premiere for the project at Park City’s Ray Theater on Thursday night, before a cast that [...]

  • Taylor Swift: Miss Americana

    'Taylor Swift: Miss Americana': Film Review

    Fly-on-the-wall portraits of pop-music stars used to be dominated by, you know, pop music. The life and personality and woe-is-me-I’m-caught-in-the-media-fishbowl spectacle of the star herself was part of the equation, yet all that stuff had a way of dancing around the edges. Now, though, it’s front and center. In “Taylor Swift: Miss Americana,” we catch [...]

  • Taylor Swift attends the premiere of

    Sundance Crowd Goes Wild as Taylor Swift Becomes Powerful Voice of Trump Resistance

    At the outset of the first screening of the documentary “Miss Americana” Thursday night at the Sundance Film Festival, it was clear at the outset that it was not necessarily Taylor Swift’s core audience filling the Eccles Theater for the premiere. The opening scene has Swift trying to write a song at the piano while [...]

  • wanda Imax China

    China Closes Thousands of Theaters in Response to Coronavirus Outbreak

    China closed swathes of cinemas on Friday in response to the outbreak of novel coronavirus, which started in the city of Wuhan and has now killed 26 people. The closures come a day after the distributors and producers of the seven major blockbusters that had expected to launch from Jan. 25 cancelled their films’ releases. [...]

More From Our Brands

Access exclusive content