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UK’s Cineworld to Buy Canada’s Cineplex in $2.1 Billion Deal

The megadeal is latest sign of consolidation in movie exhibition

The U.K.-based Cineworld will acquire Canada’s Cineplex in a deal worth $2.1 billion, the companies announced Monday.

The deal, the latest in a worldwide wave of consolidation in the movie theater industry, would create a company with 11,200 screens in the U.S., Canada, the U.K., Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.

Under the deal, Cineworld Group will acquire all of the issued and outstanding common shares of Cineplex for $34 per share in cash, representing a premium of 42% to the closing price on the Toronto Stock Exchange (TSX) and a premium of 39% to the volume weighted average share price on the TSX for the 30 days ending December 13, 2019.

The transaction is expected to close during the first half of 2020, following a go-shop period to solicit competing offers that ends on Feb. 2, 2020.

Last year, Cineworld completed its $3.6 billion acquisition of U.S.-based exhibitor Regal; the company also owns the Picturehouse and Cinema City chains.

“Cineplex is a great business. It is the No. 1 cinema operator in Canada and is well positioned for further growth,” Cineworld CEO Mooky Greidinger said in a statement. “The combination of Cineplex and Regal will create the leading North American cinema operator with unrivaled scale and opportunity. By deploying our operational best practices, we expect the transaction to create compelling value for shareholders and to be strongly EPS and free cash flow accretive.”

Cineplex CEO Ellis Jacob added in a statement, “Since Cineplex went public in 2003, we have been committed to delivering value to our shareholders. We believe this transaction today is both financially compelling and in our shareholders best interest. Cineworld Group shares our passion for entertainment and mirrors our commitment to delivering exceptional guest experiences through state-of-the-art technology. The entertainment industry continues to transform and we are pleased that through this agreement we are ensuring Cineplex is part of the next era of global entertainment.”