AMC to buy Carmike Cinemas for $1.1 billion

KANSAS CITY, Mo. - AMC Entertainment Holdings Inc., based in suburban Kansas City but owned by a Chinese company, announced Thursday night that it has agreed to purchase Carmike Cinemas Inc. for $1.1 billion.

The deal would reportedly create the world's largest movie theater chain.

AMC said it would pay $30 cash per share for all the outstanding shares of Carmike, a roughly 20 percent premium from Carmike's closing stock price Thursday.

Carmike, based in Columbus, Ga., has 276 theaters with 2,954 screens in 41 states, including the Carmike Wynnsong 12 theater on Edgewood Road in Cedar Rapids.

AMC has 387 locations and 5,426 screens, including the AMC Star Dubuque 14. If the deal goes through, the combined chain will have 8,380 screens.

AMC is the second largest movie theater chain in the country, while Carmike is the fourth largest. A merger would top the U.S. industry leader, Regal Entertainment Group, which has 7,361 screens.

In a news release announcing the deal, AMC and Carmike said the combined company would be headquartered in the Kansas City area. The CEO of AMC, Adam Aron, would be CEO and president of the new company.

'This is a compelling transaction that brings together two great companies with complementary strengths to create substantial value for our guests and shareholders,” Aron said in the release. 'We also look forward to welcoming so many talented Carmike employees to the AMC team.”

David Passman, Carmike's president and CEO, called the combination 'a transformative milestone for Carmike.” He added that the purchase price would provide 'significant value to Carmike shareholders.”

He added: 'By joining with AMC, we are bringing together two highly complementary theatre footprints and a shared commitment to service and innovation, positioning the combined company to deliver an even more compelling moviegoing experience in many more locations across the country.”

The companies' announcement stressed that the deal would diversify AMC's footprint 'with complementary geographic and guest demographic profiles.” It would also reduce administrative expenses by combining back-office support functions.

It said the merger 'is expected to produce annual cost synergies of approximately $35 million.”

The deal is expected to close by the end of the year, subject to regulatory approval and approval by Carmike's shareholders.