Mexican Regulators Block Sale of Cinemark Theater Chain to Rival Cinemex
MEXICO CITY -- Regulators here have blocked Texas-based Cinemark's attempt to sell its Mexico theater chain to rival exhibitor Cinemex.
Cinemark entered into an agreement in February to sell its 290 screens to Mexican-owned Cinemex for an undisclosed amount; however, the deal required approval from Mexico's Federal Competition Commission.
The commission voted 3 to 2 in favor of halting the transaction, which would have left just two major players in Mexico's exhibition market: Cinepolis and Cinemex. Market leader Cinepolis has an estimated 66 percent share. Had the deal gone through, Cinemex would have gained control of about 31 percent of the market, leaving roughly 3 percent market share for indie theaters and small family-run chains.
Cinemark, which will appeal the ruling, said it was looking to sell its Mexico circuit in order to focus on growth elsewhere in Latin America.
"We are disappointed in today's ruling and will continue to evaluate our alternatives," said Cinemark CEO Tim Warner.
Cinemark's Mexico theaters pulled in about $74 million in revenue last year.