Regal Entertainment Group, which has long been one of the most successful movie theater chains in the United States, will no longer be a U.S.-owned company from this point forward. The British corporation Cineworld announced Tuesday that it’s agreed to purchase Regal for $3.6 billion in a move that will greatly expand the geographic footprint of the European cinema titan.
The New York Times reported that Cineworld is making the move in an effort to better compete with AMC Entertainment, another popular U.S. brand that’s under foreign control. AMC is owned by the Chinese conglomerate Dalian Wanda. Together, Cineworld and Regal will form a company that owns 9,500 total movie screens spanning 10 different countries.
“Regal is a great business and provides Cineworld with the optimal platform on which we can continue our growth strategy,” Cineworld chief executive Mooky Greidinger said, according to the Times. “Consolidation is an important move forward, and the best practice we have successfully rolled out across Europe will be the key driver [of] continued success.”
This deal came together quickly, as it was only initially reported last week that the two companies were in advanced discussions regarding the merger. The terms of the deal stipulate that Cineworld will buy Regal for $23 per share. On December 7 at 1 p.m. ET, Regal’s stock was trading at $22.58 per share.
In making this purchase, Cineworld also acquires the rights to Regal’s most popular theater brand names, including Regal Cinemas, United Artists, and Hollywood Theaters.
This purchase comes at a difficult time for the movie industry, as theaters are fighting for consumers’ attention and money in an increasingly crowded entertainment marketplace. Despite the popularity of superhero blockbusters like Wonder Woman and Guardians of the Galaxy Vol. 2, box office revenues overall in the U.S. are down this year, and Cineworld now faces the challenge of keeping its new American business profitable.
Photo: A Regal Cinema in Maryland. Credit: Lissandra Melo / Shutterstock.com