TORONTO (CelebrityAccess) — U.K.-based Cineworld Group will acquire Canada’s largest movie theater chain in a proposed $2.8-billion deal.
Cineplex, the largest theater chain in Canada, includes 165 cinemas and 1,695 screens and after the merger, will provide Cineworld with a 75 percent box office market share, the company said.
The cash deal, which has already garnered support from Cineworld’s board, will see Cineworld pay $34 per share for Cineplex.
Cineworld expects to combine Cineworld’s cinema assets with its current holdings in the US to compete with digital on-demand video services such as Netflix amid declining cinema attendance.
“Going forward our immediate post-acquisition objectives will be to combine Cineplex with our US business to create a leading North American cinema operator; maximize the synergistic combination benefits of the Cineplex acquisition; continue the currently successful refurbishment of the Regal chain in the US; and focus strongly on a structured debt reduction program targeting leverage towards 3x net debt / EBITDA by the end of 2021,” Cineworld Chairman Anthony Bloom said.
According to its most recent financial filings, Cineplex reported annual attendance in 2018 of 69.3 million, down sharply from 2015 when attendance at its cinemas peaked at 77 million.
The proposed deal, which is still subject to regulatory clearance and shareholder approval, is expected to complete in the first half of 2020.