AMC Theatres set to buy Odeon cinema chain in £921m deal

 
Francesca Washtell
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Get your popcorn ready, as AMC has said Odeon's screens are about to get bigger (Source: Getty)

AMC Theatres has agreed to buy Odeon from private equity group Terra Firma Capital Partners for £921m.

The deal to buy Odeon and UCI Cinemas Group is the largest to be agreed since the UK voted to leave the EU last month. It will make AMC Entertainment Holdings, which owns AMC Theatres, the largest cinema operator in the world.

The £921m will be comprised of £500m in equity, of which 75 per cent will be cash and 25 per cent in stock consideration, as well as the assumption of £407m of net debt.

AMC has said it expects increases in attendance and revenue at Odeon and UCI theatres after the takeover. The company will emphasise its "proven growth initiatives" such as introducing more recliner seating, enhanced food and drink offerings and premium large format auditoriums.

The Odeon and UCI Cinemas Group sale was first announced last February, and Dalian Wanda was linked to the sale in October.

Read more: Odeon owner in talks to sell chain for £1bn to AMC Entertainment Holdings

Odeon is Europe's leading cinema chain, with more than 240 cinemas and 2,200 screens in seven countries including the UK, Spain, Portugal and Ireland.

"This is a once-in-a-generation opportunity, to acquire Europe's leading cinema chain and create the world's biggest and best theatre operator," AMC chief executive and president Adam Aron said.

"With this opportunistic transaction, AMC will be extending the reach of our proven guest-experience strategies to transform the movie-going experience for millions of move goers in Europe.

"Odeon & UCI is a great business with iconic brands, strong market presence and passionate teams, and their impressive recent transformation is just the beginning."

Read more: Odeon pins hopes on Star Wars and 007 to narrow 2014 losses

Odeon and UCI Cinemas Group were snapped up separately by Terra Firma founder Guy Hands in 2004 for £566m and £310m respectively, before they were merged to create the joint entity.

The number of Odeon and UCI screens has increased from 1,453 in 2004 to 2,236 today.

Guy Hands, chairman and chief investment officer of Terra Firma, said: "We are delighted to realise our investment in Odeon & UCI after 12 years of ownership. In that time, over £600m was invested in growing the business and delivering our long-term transformational strategy."

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