AMC Entertainment to buy Odeon & UCI Cinemas in £921m deal

AMC Entertainment Holdings has agreed to buy London-based Odeon & UCI Cinemas Group from private equity firm Terra Firma in a deal worth around £921m.

The deal value comprises £500m for the equity and the assumption of £407m of debt. AMC, which is also currently in the process of acquiring US-based theatre exhibitor Carmike Cinemas, said the equity portion of the deal will be paid for 75% in cash and 25% in stock.

The company said the deal was expected to further diversify its footprint by adding theatres with complementary global geographic and guest demographic profiles that strengthen the combined group’s growth potential.

Odeon & UCI currently has 242 theatres and 2,236 screens and is the number one theatre operator in Europe. For the 12 months ending 21 March, it generated revenue of around $12bn.

AMC’s chief executive officer and President Adam Aron said: “This is a once-in-a-generation opportunity to acquire Europe’s leading cinema chain and create the world’s biggest and best theatre operator.

“With this opportunistic transaction, AMC will be extending the reach of our proven guest experience strategies to transform the movie-going experience for millions of movie goers in Europe. Odeon & UCI is a great business with iconic brands, strong market presence and passionate teams, and their impressive recent transformation is just the beginning. By introducing AMC’s operational expertise, scale and innovative guest initiatives across Odeon & UCI’s prime theatre locations and digital channels, we expect to drive attendance in these international markets and leverage the growing international demand for movie-going.”

Aron said that while there are some uncertainties related to Brexit, current currency rates are highly favourable to AMC, with sterling at a three-decade low against the US dollar.

RBC Capital Markets said it was not clear there will be meaningful cost synergies, but greater scale may benefit film rents.

“More strategically, we see this is as more of a platform acquisition that will give AMC the ability to do further M&A in Europe and drive revenue and cost synergies in that market.”