US cinema chain Regal Entertainment Group has announced that it has entered into a definitive agreement that will see the company bought by UK-based Cineworld in a deal worth $3.6bn.
The deal will see Cineworld paying $23 per Regal share - a 12% premium on the company’s 30-day share price.
“We are excited to have reached an agreement with Cineworld, at a price that represents a meaningful premium on Regal’s unaffected share price for our shareholders,” said Amy Miles, CEO of Regal Entertainment Group.
The move will see Cineworld, the largest cinema operator in the UK, expanding into the US market for the first time. The move is a logical one for the company, with the US having the largest box office takings globally – something that it will be able to take advantage of using Regal’s 7,315 screens and 561 theatres across the US.
“We believe this partnership with Cineworld will enhance Regal’s ability to deliver a premium movie-going experience for customers and further build upon our strategy of introducing innovative concepts and premium amenities designed to enhance the value of our theatre assets,” Miles continued.
The transaction was approved unanimously across the Boards of both Regal and Cineworld, with the merger set create the world’s second largest Cinema operator.
“The combination of our two great companies, Cineworld’s tremendous success in the UK, as well as other markets they have entered since, and Cineworld’s commitment to maintain a strong presence in the US and Knoxville, provide a global platform positioned for continued growth and innovation,” Miles concluded.
Cineworld has said that it will fund the acquisition through a mixture of debt and a £1.7bn ($2.3bn) equity fundraising.