Justice Department Reaches Settlement Over AMC Acquisition of Starplex Cinemas

AMC agrees to divest theaters to allow its $172 million acquisition to move forward.
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The U.S. government has reached a settlement regarding AMC Entertainment's $172 million acquisition of Starplex Cinemas.

AMC has agreed to divest itself from theaters in New Jersey and Connecticut to satisfy antitrust concerns.

The announcement of a settlement comes in conjunction with a complaint filed in D.C. federal court by the attorney general's office as well as by the State of Connecticut on Tuesday.

There, a judge was told that if the acquisition is permitted to proceed, it would give AMC control of its most significant competitor in East Windsor, N.J., and Berlin, Conn., and would "substantially lessen competition in the exhibition of first-run, commercial movies in each of these markets in violation of Section 7 of the Clayton Act."

AMC announced its Starplex deal in July,  giving it control over 380 theaters with 5,300 screens. At the time, recliner re-seats was touted as one of the benefits for the public.

That wasn't immediately enough for the Justice Department.

According to the complaint, "The transaction would likely have the following effects, among others: (a) the prices of tickets at first-run, commercial movie theaters in East Windsor and Berlin would likely increase to levels above those that would prevail absent the acquisition; and (b) the quality of first-run, commercial theaters and the viewing experience at those theaters would likely decrease below levels that would prevail absent the acquisition."

A settlement still needs approval from a judge. A 60-day comment period will commence.