Ian Ritter is national online editor of GlobeSt.RETAIL.
NEW YORK CITY-AMC Entertainment Inc. and Loews Cineplex Entertainment Corp. are merging in a deal that will give the combined entity about 450 theaters in 30 states with 5,900 screens. The merged company, which will take AMC's name, will be the country's second-largest theater chain after Regal Entertainment Group, the operator of 558 cinemas housing 6,273 screens.
AMC Entertainment's headquarters will remain in Kansas City, MO, where the 229-theater, 3,546-screen-company currently resides. Loews is a bit smaller than AMC, with 221 theaters and 2,218 screens.
Peter C. Brown, AMC's chairman, CEO and president will co-chair the new company with Travis E. Reid, CEO and president of Loews. Marquee Holdings, the firm that owns AMC, will be the majority owner of the new entity. LCE Holdings Inc., Loews' owner, will get 40% of AMC Entertainment. They expect the deal to close within six to nine months.
The deal follows the recent acquisitions of both chains by private investment groups. Last July, JP Morgan Partners and Apollo Management, the controllers of Marquee Holdings, bought out AMC for $2 billion. The month before that, the stockholders of LCE Holdings, Bain Capital Partners, the Carlyle Group and Spectrum Equity Investors, purchased Loews for $1.5 billion. AMC had earlier been in talks to buy Loews.
This latest deal is "a financial play," Dennis McAlpine managing partner of McAlpine Associates, a Scarsdale–based entertainment research firm, tells GSR. The controlling investment firms will likely look to take AMC Entertainment public, he says. "Their main thing is going to be 'What's my exit strategy?'" McAlpine says.
The merger of the two chains will likely make them more dominant in certain markets where they could challenge Regal, McAlpine says, though the two could close some theaters that are close to each other. For example, both AMC and Loews have nearby theaters on 42nd Street in Manhattan.
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