Billionaire Alexander Mamut Continues Russia Theater Consolidation

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In less than a week Mamut purchased Russia's No. 1 and No. 2 cinema chains in the industry's biggest-ever consolidation drive.

Russian tycoon Alexander Mamut has acquired Formula Kino, the country's second-largest cinema chain, in the biggest-ever consolidation drive in the industry.

The deal comes less than a week after Mamut's investment company, A&NN Investments, acquired Russia's No 1 cinema chain, Cinema Park.

The value of the deal was not disclosed, but Russian business daily RBC put it in the range of 9 billion rubles ($150 million) to 10.2 billion rubles ($181 million).

The deals are likely to become a game changer in the industry, which for years has been a tight race with no apparent leader.

The consolidation of Cinema Park and Formula Kino is set to create by far the largest player with 74 theaters and 611 screens, according to data from Nevafilm Research.

Mamut, whose net worth is $2.4 billion, according to Forbes, first got interested in the movie theater business in 2008. Back then he acquired and renovated Moscow's iconic Pioner cinema, turning it into the Russian capital's main venue for art house movies.

In late 2016, he struck a deal with the Moscow government for another historic movie theater, Khudozhestvenny, renting it for 20 years in exchange for investing 1 billion rubles ($17.6 million) in its renovation.

Mamut's decision to acquire the major cinema chains was apparently driven by good box-office performance of several recent local movies, including Viking, which grossed $27 million earlier this year, business daily Vedomosti reported.