Kansas City, Mo. – Movie theater chains AMC Entertainment Inc. and Loews Cineplex Entertainment Corp. said Tuesday that they plan to merge and will be led by current AMC chairman, chief executive and president Peter C. Brown.
The new company will be called AMC Entertainment Inc. and will be based in Kansas City. The combined entity will own, manage or have interests in about 450 theaters in 30 states and 13 countries.
It will still be a No. 2 competitor behind Denver investor Philip Anschutz’s Regal Entertainment Group, which has more than 6,200 screens. The new company will have 5,900 screens.
AMC has theaters in Broomfield, Highlands Ranch, Westminster and Aurora. The company’s four Denver-area theaters have a combined 72 screens. Loews does not operate in the state.
An integration committee will be formed in which Travis E. Reid, president and CEO of New York-based Loews Cineplex, and Brown will serve as co-chairmen.
The agreement also provides for the merger of AMC’s and Loews’ holding companies. In late 2004, a group of private investors purchased AMC, the nation’s second-largest theater chain, for about $2 billion. Bain Capital, Carlyle Group and Spectrum Equity Investors acquired Loews Cineplex from Onex Corp. and Oaktree Capital Management in 2004 for $1.5 billion.
Michael L. Savner, an analyst with Banc of America Securities, said in a research note that the merger “makes sense … given the similar urban focus of both companies and the benefits that can be achieved through economies of scale.”
Savner said Regal and the third-largest chain, Carmike Cinemas Inc., focus on different markets than AMC and Loews, so he does not expect “meaningful competitive implications.” And although Hollywood has been experiencing its longest box-office decline in 20 years, Savner said he expects trends to improve in the second half of the year.
AMC spokeswoman Pam Blase said the industry always has ups and downs.
“It’s safe to say we’re in a down cycle right now, but it will go up again, and we will be there with a very strong company,” Blase said. She could not say immediately whether the merger would result in theater closings or layoffs.
AMC and Loews said they expect the merger to close within six to nine months. Financial details weren’t disclosed.
Denver Post staff writer Kristi Arellano contributed to this report.
