Brexit on the big screen: AMC to buy Odeon as the pound falls
13 July 2016 by Thomas Utting
It has been announced that a deal has been struck by US-based cinema chain AMC Entertainment to buy the Odeon & UCI Cinemas Group for over £920m.
Back in 2004, Odeon was bought by Terra Firma who went on to merge the chain with UCI Cinemas in order to create the largest UK cinema chain. Twelve years later, Terra Firma are now realising their investment and handing over the reins to AMC Entertainment. Nevertheless, Odeon will continue to operate from its base in London and will simply act as a subsidiary of AMC.
AMC is predominantly owned by the Dalian Wanda Group belonging to Chinese billionaire Wang Jianlin and this acquisition of Odeon’s 242 cinemas will make it the biggest cinema chain in the world with over 7,600 screens in 627 theatres.
However, Odeon is not the only company that the Wanda Group has set its eyes on. In January, Legendary Entertainment who produced such films as Jurassic World and Inception was acquired for roughly $3.5bn. Furthermore, the group is in talks to purchase the Carmike cinema chain for a further £1.1bn, although there is speculation that the transaction may fall through if agreement cannot be reached with the company’s shareholders.
Reports claim that the deal to purchase Odeon was inspired by the favourable exchange rate currently available, with the pound dropping to a three-decade low against the dollar. However, as with all deals of this scale, the European Commission will need to review any potential anti-competitive effects of the acquisition prior to giving it clearance.
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