AMC Theatres to Acquire Nordic Cinema Group in $929M Deal

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AMC Theatres

"For the third time in the past 12 months, we believe we have discovered a substantial acquisition," says the exhibition giant owned by China's Dalian Wanda Group.

Exhibition giant AMC Theatres, owned by China's Dalian Wanda Group, said Monday that it has reached a definitive agreement to acquire the largest theater exhibitor in seven countries in the northern region of Europe, Stockholm-based Nordic Cinema Group Holding, in a deal valued at $929 million.

It will further strengthen the group in Europe where it is already the largest operator of movie theaters.

The company is purchasing the largest exhibitor in the Nordics and Baltics from European private equity firm Bridgepoint and Swedish media group Bonnier Holding in an all-cash transaction valued at SEK 8,250 million.

The transaction is conditional upon antitrust clearance by the European Commission, which it expects to receive in the first half of the year.

Nordic operates 68 theaters and has a substantial minority stake of nearly 50 percent in another 50 associated venues, to which Nordic provides a variety of shared services. Nordic uses several brands, including SF Bio in Sweden, SF Kino in Norway, Finnkino in Finland, and Forum Cinemas in Estonia, Latvia and Lithuania. Additional associated venues also operate in Denmark.

Nordic's cinemas are number one in market share in Sweden, Finland, Estonia, Latvia and Lithuania. Nordic currently is number two in market share in Norway, and with a new theater under construction in Norway and scheduled to open next year, is expected to increase market share in Norway to number one as well. Nordic also has cinemas in Denmark.

AMC Theatres completed its $1.2 billion acquisition of London-based Odeon & UCI Cinemas, the largest movie exhibitor in Europe, late last year. Just before the end of the year, it also completed the takeover of Carmike Cinemas for approximately $1.1 billion, making it the largest U.S. movie theater chain.

"For the third time in the past 12 months, we believe we have discovered a substantial acquisition that gives AMC yet another opportunity to further expand and diversify our geographic reach and more firmly establish AMC as the undisputed leader in movie exhibition worldwide," said AMC president and CEO Adam Aron.

Nordic had approximately SEK 2.938 billion, or $349 million, of revenue in 2015. Revenue for the 12 months ended Sept. 30 amounted to SEK 3.159 billion, or $375 million. AMC said it expects to realize approximately $5 million in annual cost synergies under the deal.

Nordic will maintain its Stockholm headquarters location, but will operate as a subsidiary of London-based Odeon Cinemas Group, which AMC acquired in November.

Said Aron: "It has been our observation that Nordic is extremely well-run with a modern up-to-date theater circuit that in our opinion offers tremendous value potential for AMC over the foreseeable future. We are also excited by the growth potential of Nordic as it moves forward with 10 theaters already in development or re-development. We have been impressed with Nordic's talented leadership team, and further believe that their added expertise will be invaluable to us in helping to drive AMC's progress across Europe. AMC will bring additional efficiencies of scale and innovative strategic initiatives to the Nordic brands."