AMC Closes Acquisition of Loews Cineplex
KANSAS CITY, Mo. -- AMC Entertainment Inc. on Thursday said it had completed its purchase of Loews Cineplex Entertainment Corp., strengthening its position as the nation's second-largest theater operator.
The Kansas City-based company now will operate 415 theaters with 5,672 screens in 29 states and the District of Columbia and 11 foreign countries. Annual revenues for the privately held company are expected to be around $2.4 billion.
Financial terms for the deal were not released.
"What I'm most excited about is the potential to continue the innovation and lead our industry the way both of these companies have been doing," said Peter Brown, AMC's chairman and chief executive officer, who will remain head of the company. "I think the innovation potential and the growth potential are enormous." Travis Reid, Loews' president and CEO, will serve as a board member for AMC's parent company, Marquee Holdings Inc.
In an interview, Brown said he didn't foresee the company changing the overall number of theaters, although he said it will continue to replace older theaters with newer, stadium-style ones. He also didn't predict any changes to its worldwide work force of 24,000.
AMC and Loews agreed last year to sell 10 theaters with 120 screens to resolve consolidation concerns by the Justice Department and attorneys general in California, Illinois, Massachusetts, New York, Washington state and the District of Columbia. The theaters are in Chicago, New York City, Boston, San Francisco, Seattle, Dallas and Washington, D.C.
Before the acquisition, AMC operated 226 theaters with 3,522 screens, while Loews, based in New York City, operated 198 theaters with 2,235 screens.
Combined, they still remain behind Knoxville, Tenn.-based Regal Entertainment Group, which controls 6,605 screens at 579 theaters in 40 states.
The combination follows a year in which U.S. ticket sales were at the lowest level since 1997, a problem the industry blamed on bad films as well as stiff competition for consumers' entertainment dollars.
It also comes a day before the debut of "Bubble," a film by award-winning director Steven Soderbergh, that has many in Hollywood predicting it could change the marketing and distribution of movies. "Bubble" is being released on the same day both in a limited number of theaters and on pay-per-view television. The DVD is being released Tuesday.
AMC is among the major theater circuits not carrying the film, and Brown said moviegoers should be concerned if other movies follow suit.
"I think at the end of the day what would happen with that economic model is that the quality would be lowered when we're living with each picture being a direct-to-video picture," he said. "We just don't think that's a good thing to happen at all." Media companies, however, have defended the so-called "day and date" release strategy as a way to serve consumers becoming more accustomed to getting content immediately, as shown by the popularity of iTunes and cell phone companies selling snippets of television shows for portable devices.
AMC and Loews discussed merger plans in the past, calling off discussions in January 2004, just before a group of private investors purchased the publicly traded AMC for about $2 billion. Bain Capital, Carlyle Group and Spectrum Equity Investors also acquired Loews Cineplex from Onex Corp. and Oaktree Capital Management for $1.5 billion in 2004.