Jostled by Netflix and Amazon, the film industry continues its consolidation


Room operator Regal has announced that it is in discussions with CineWorld, which could buy it back. This deal should amount to nearly $ 3.6 billion.

New major acquisition in the movie theater industry. The number two American Regal Entertainment announced that the British CineWorld had entered into discussions with him in order to make his acquisition.

The offer values Regal, which operates 561 cinemas and 7,315 screens, 3.6 billion dollars. Controlled by billionaire Philip Anschutz, the group had enlisted the bank Morgan Stanley in 2014, so that it finds a buyer. Without success.

For its part, Cineworld is present in a dozen European countries (Great Britain, Ireland, Poland) where it operates more than 200 cinemas for 2,136 screens.

With this acquisition, the Anglo-Saxon group would change size and set foot on Hollywood lands where he will notably scrape with the world leader in the sector: AMC.

AMC multiplies acquisitions
Acquired $ 2.6 billion by the Chinese giant Wanda in 2012, this network of American theaters today has 1,006 cinemas for 11,046 screens in 15 countries.

In a year and a half, its fleet has grown considerably with the successive purchases of the American Carmike (for $ 1.1 billion), the British Odeon & UCI (1.2 billion), as well as the Swede Nordic ( 929 million).
The sector is currently in full consolidation. A necessary movement for market players who have to deal with the rise of video streaming platforms (Netflix, Amazon) and the more general success of TV series (“Game of Thrones”, “Stranger Things” .. .) which dry up the attendance of the dark rooms.

Deadly summer in Hollywood
This year, US movie theater operators had their worst summer (the best time for industry in the US) for a decade in terms of revenue. “The quarter is simply a fiasco,” said Adam Aron, the CEO of AMC.
The American film industry is also suffering from its paradigm shift and blockbuster dependence. For some years now, the big studios have been relying on a handful of blockbusters.

A double-edged model. When the public is at the rendezvous in theaters, these films are cash machines. Conversely, the failure can be resounding, like last summer, and directly impacts the cinema operators.
Forced to reinvent themselves, they rely on the upscaling of their offer but also on new experiences in virtual reality to maintain their associates and their margins.
Revealed by Reuters on Tuesday, the dealings between Regal and CineWorld have jumped by 16% the market price of the first. On Wednesday, the group’s action climbed further by 5.7% at mid-session. Same trend on the side of their rivals AMC or Cinemark Holding who saw their titles climb by more than 10% in the last two days.

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