AMC gets approval to buy Carmike Cinemas

AMC Entertainment has won approval from the U.S. Department of Justice to buy Carmike Cinemas for $1.2 billion, clearing the way for an acquisition that will create the biggest U.S. movie theater chain.

But AMC will have to sell off some theaters and other holdings in order to satisfy regulators. In a proposed settlement filed Tuesday, AMC agreed to divest theaters in 15 geographical areas where its circuit overlaps with Carmike's.

AMC will get to choose which theaters it unloads during the 60 days after the deal closes, Chief Executive Adam Aron said in a conference call with investors and analysts. The company expects to sell 15 to 20 theaters, mostly from the Carmike chain, including two Starplex locations.

'Moviegoers across the United States have benefitted from head-to-head competition between AMC and Carmike that has kept ticket prices in check and delivered a higher quality movie experience,” Acting Assistant Attorney General Renata Hesse said in a statement. 'Today's settlement will ensure that movie theater competition is preserved in 15 local markets where AMC and Carmike currently compete.”

Carmike and AMC are direct competitors in markets in Montgomery, Ala.; Destin and Miramar Beach, Fla.; and Cumming, Ga., the Justice Department said.

Leawood, Kan.-based AMC will pay $33.06 a share for Carmike of Columbus, Ga. By buying Carmike, AMC will expand its reach to easily more than 600 theaters, surpassing Regal's 565 locations for the No. 1 spot. AMC is currently No. 2, and Carmike is No. 4.

The deal received shareholder approval last month after some Carmike investors balked at a lower price first offered in March.

Carmike Cinemas operates the Wynnsong 12 at 2435 Edgewood Rd. SW in Cedar Rapids as well as movie theaters in Des Moines and Johnston.

AMC is owned by Chinese real estate and entertainment giant Dalian Wanda Group. The company in November closed a deal to buy British theater owner Odeon & UCI Cinemas Group.