AMC has announced plans to acquire Carmike Cinemas for a reported $737 million in cash. Under the terms of the deal, AMC will offer $30 a share, an increase of 19 percent over Carmike’s closing price on Thursday. AMC would also Carmike’s debt, making the transaction worth about $1.1 billion. If approved, the deal would give AMC more than 600 theatres, making it the largest theatre chain in the country.
Regal is currently number one with 572 theatres and 7,361 screens. The deal would add Carmike’s 2,954 screens to AMC’s 5,426, a total of 8,380 screens. AMC, is strong in large markets, including New York, Los Angeles and Chicago. Most of Carmike’s screens are in midsize cities across the Midwest and the South.
The deal is an aggressive move by AMC’s controlling investor, Wang Jianlin of China’s Dalian Wanda Group, to consolidate the American cinema industry. AMC has estimated that the merger would yield about $35 million in annual cost savings. The deal must be approved by government regulators and by Carmike shareholders.
“This is a compelling transaction that brings together two great companies with complementary strengths to create substantial value for our guests and shareholders,” said AMC CEO Adam Aron.
Together with Regal, AMC also owns Open Road Films, which distributed Spotlight, this year’s Best Picture Oscar winner.