Cineworld to Buy Regal in $3.6 Billion Theater Deal

British movie theater operator Cineworld has agreed to buy American counterpart Regal Entertainment for $3.6 billion, creating the world’s second-largest cinema operator.

Cineworld said Tuesday the deal would give it a meaningful footprint in the U.S.–the biggest box office market–and create a company with more than 9,000 screens.

It added that the combined group’s scale will help it mitigate any volatility in particular markets and match the global nature of rivals, including industry leader AMC Entertainment.

AMC, part of China’s Dalian Wanda Group, last year bought Odeon & UCI Cinemas Group in Europe, and ran or had interests in more than 11,000 screens in 1,006 theaters as of Sept. 30, according to regulatory filings.

Cineworld will pay $23 a share for Regal as announced last week when it confirmed that the two companies were in talks.

Regal is the second-largest movie theater operator in the U.S. with 7,315 screens in 561 theaters and is controlled by Phil Anschutz’s Anschutz Corp. Mr. Anschutz, whose fortune Forbes estimates at more than $12 billion, was part of a consortium that took control of the then Regal Cinemas Inc. in 2001 after the chain entered chapter 11 bankruptcy protection.

Cineworld is the second-largest cinema business in Europe with 2,227 screens at 232 sites across nine countries.

The company will fund the acquisition through a mixture of debt and a GBP1.7 billion ($2.29 billion) equity fundraising. Its shares fell 3.5% in early trading in London.

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