The deal would greatly expand the scale and geographic footprint of British theater owner Cineworld, which primarily operates in Europe, and create the world’s second-largest movie-theater owner to better compete with AMC, which is owned by Chinese conglomerate Dalian Wanda.
LONDON — The two largest movie-theater chains in the United States will soon be owned by foreign companies.
British movie-theater owner Cineworld said Tuesday it had agreed to acquire Regal Entertainment Group, one of the biggest cinema operators in the United States, for $3.6 billion.
The deal would greatly expand the scale and geographic footprint of Cineworld, which primarily operates in Europe, and create the world’s second-largest movie-theater owner to better compete with AMC Entertainment, which is owned by Chinese conglomerate Dalian Wanda.
The Cineworld-Regal combination would create a company with more than 9,500 screens in 10 countries.
It comes at a time of flux for operators of movie theaters competing for attention and dollars in an increasingly saturated marketplace. At the same time, studios, such as The Walt Disney Co., are exerting more control over when and how their biggest films are shown, putting pressure on operators.
Despite higher average ticket prices, box-office revenue is down in the United States this year after a dismal summer.
The few standouts were the superhero flicks, “Wonder Woman,” “Guardians of the Galaxy Vol. 2” and “Spider-Man: Homecoming.” The latest adaptation of Stephen King’s “It” was also a bright spot this autumn, but “Justice League,” which brought together some of DC Comics’ biggest heroes, opened to disappointing results in North America last month.
Ticket sales are likely to be bolstered by the release of “Star Wars: The Last Jedi” this month.
“Regal is a great business and provides Cineworld with the optimal platform on which we can continue our growth strategy,” Mooky Greidinger, Cineworld chief executive, said in a news release.
“Consolidation is an important move forward, and the best practice we have successfully rolled out across Europe will be the key driver to continued success.”
Regal is the second-biggest cinema operator in the United States behind AMC, with 7,315 screens at 561 cinemas. Regal is controlled by billionaire Philip F. Anschutz’s Anschutz Corp., which has agreed to support the deal.
Cineworld, which was founded in 1995 in Britain, is the second-largest movie-theater chain in Europe, after AMC, with 2,227 screens at 232 sites in Europe and Israel. It reported revenue of about $1.1 billion in its 2016 financial year.
Regal’s theater brands include Regal Cinemas, United Artists and Hollywood Theaters. It reported revenue of $3.2 billion in fiscal 2016.
The deal is expected to be completed in the first quarter of next year.
Cinemark starts subscription program
Cinemark, the third-largest U.S. theater chain, began a subscription program that gives customers discounts on tickets and concessions, in the latest effort to boost attendance.
The Plano, Texas-based company said Tuesday that customers who pay a monthly fee of $8.99 will receive a credit for one movie ticket a month. Subscribers can also buy additional tickets for $8.99 each and get a 20 percent discount on food and drinks.
If customers don’t use the ticket credit in a given month, it rolls over into the next months and does not expire. The program also includes the ability to reserve seats and buy tickets in advance with no online fees.
Cinemark’s offer, Movie Club, is the cinema industry’s first direct answer to MoviePass, a New York startup that offers unlimited movies in theaters for $9.95 a month.
Theater chains have long resisted discounting tickets, fearing that doing so would erode profits. But long-term pressures on the industry have prompted some exhibitors to reconsider their opposition.
Mark Zoradi, CEO of Cinemark, said the subscription is not targeting people who already go to the movies multiple times a month. Instead, the chain is hoping the deal will encourage people who go to three to four movies a year to increase their annual moviegoing to about six trips.
— Ryan Faughnder,
Los Angeles Times