KANSAS CITY, Mo. _ Hampered in its $1.1 billion merger in the United States, AMC Entertainment Holdings Inc. has struck a $1.2 billion deal in Europe.
It agreed to buy London-based Odeon & UCI Cinemas Group, a merger that would make the parent company of the AMC Theatres chain the largest movie theater operator in the world.
AMC, based in suburban Kansas City, said it still is pursuing the U.S. deal, a $1.1 billion acquisition of rival Carmike Cinemas. The Carmike purchase was put on hold just as Carmike shareholders were to vote on the sale.
"The Odeon & UCI transaction does not impact AMC's ability to complete the Carmike transaction as AMC has the financing commitments and flexibility to do both transactions," AMC said in an announcement of the newest deal.
AMC chief executive Adam Aron said buying Europe's largest theater operator now represents a "once-in-a-generation opportunity."
Great Britain's vote to exit the European Union depressed the value of the British pound and made AMC's offer less costly in terms of U.S. dollars. Aron added in the news release that Britain's exit from the European Union does add risks to the European operation's future.
AMC plans to apply many of the changes it has made in its U.S. theaters to those it is buying through Odeon & UCI. These include replacing traditional seating with leather recliners in many theaters.
The Odeon & UCI chain operates in the United Kingdom, Germany, Italy, Austria, Portugal and Spain. The deal will require regulatory approvals but AMC won't run into a shareholder issue as it has in bidding for Carmike.
Odean & UCI's owner is Terra Firma, a private equity investor that has owned the European theater chain for 12 years. The chain grew to 2,236 screens from 1,453 in 2004.
"We are confident that under AMC's ownership, Odeon & UCI will continue to grow and thrive," Guy Hands, Terra Firma's chairman and chief investment officer, said in the announcement.
The European operation's future still matters to Terra Firma. It is accepting AMC shares in addition to cash in the sale. AMC is paying about $487.5 million in cash and $162.5 million in AMC shares to Terra Firma. The $1.2 billion price tag includes Odean & UCI debt that AMC is taking on in the purchase.
AMC is largely owned by China-based Dalian Wanda Group though a portion of AMC's shares trade publicly. Shares had gained $1.46, or 5.3 percent, in mid-morning trading at $29.23.
