Cinema chains to star in £1bn mega-merger

 
Oliver Smith
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CINEWORLD last night confirmed it is in talks to seal a £900m merger with Warsaw-listed Cinema City International (CCI), a deal that would create a cinema chain with nearly 2,000 screens spread across Europe and Israel.

Cineworld, which is due to issue a trading update today, is the UK’s largest cinema operator by market share, but trails rival Odeon by a number of cinemas.

“Cineworld Group confirms that it is in advanced discussions with Cinema City International regarding a possible transaction with CCI’s cinema operations,” Cineworld said in a statement.

“Discussions are continuing and there can be no certainty that a transaction will take place.”

The deal, if completed, would combine Cineworld’s 101 UK cinemas with CCI’s 99 multiplexes spread across seven countries including Israel, Poland and the Czech Republic.

Cineworld’s rivals have been expanding overseas in recent years, Odeon now operates cinemas in seven countries and Vue Entertainment has cinemas in five.

Cineworld yesterday had a market value of £590m, while CCI is worth 1.5bn Polish Zloty (£305m).

The UK box office exceeded the £1bn mark for the fifth consecutive year in 2013, with ticket sales of £1.16bn, according to tracker Rentrak. The box office takings show a slight fall from 2012’s bumper £1.17bn, largely due to weaker ticket sales last year.

CCI could not be reached for comment last night.