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Cineworld merger widens vision as Europe's second biggest cinema chain Cineworld merger widens vision as Europe's second biggest cinema chain
(about 1 hour later)
Cineworld will become Europe's second largest cinema chain after Odeon UCI, as it unveiled plans to buy a major central European equivalent.Cineworld will become Europe's second largest cinema chain after Odeon UCI, as it unveiled plans to buy a major central European equivalent.
Cineworld, which already earns the biggest box-office revenues in the UK, announced on Friday that it will buy Cinema City International, a Warsaw-listed company operating in seven countries in central and eastern Europe and Israel. Cineworld said it would pay £272m in cash for Cinema City in a deal that allows CCI to keep 24.9% of the shares. Shares in Cineworld rose almost 5% in early trading to 409.5 pence valuing the company at almost £620m. The deal will be part-funded through a £110m rights issue.Cineworld, which already earns the biggest box-office revenues in the UK, announced on Friday that it will buy Cinema City International, a Warsaw-listed company operating in seven countries in central and eastern Europe and Israel. Cineworld said it would pay £272m in cash for Cinema City in a deal that allows CCI to keep 24.9% of the shares. Shares in Cineworld rose almost 5% in early trading to 409.5 pence valuing the company at almost £620m. The deal will be part-funded through a £110m rights issue.
Once the deal is complete, the combined chain will have 201 outlets, mostly multiplexes, and 1,852 screens, making it the largest or second largest player in all the markets it operates in. Once the deal is complete the combined chain will have 201 outlets, mostly multiplexes, and 1,852 screens, making it the largest or second largest player in all the markets it operates in.
Anthony Bloom, the chairman of Cineworld, said the deal offered "growth prospects and attractive returns via exposure to some of the most promising cinema markets in Europe". He added: "Cinema City is an extremely well-run and dynamic business, which creates a platform for further growth in future."Anthony Bloom, the chairman of Cineworld, said the deal offered "growth prospects and attractive returns via exposure to some of the most promising cinema markets in Europe". He added: "Cinema City is an extremely well-run and dynamic business, which creates a platform for further growth in future."
The tie-up creates a tidy solution to Cineworld's search for a new boss, following the decision of founding chief executive Steve Wiener to step down after 44 years in the business. Mooky Greidinger, Cinema City's chief executive since 1984, will lead the merged company. Greidinger took Cinema City into central Europe in the late 1990s, just as cinema visits began to rise in these countries. Between 2009-2012 Cinema City revenues grew by around 14% and operating profit by 15% to around €22.5m (£18.6m). He said: "After nearly four decades in the cinema industry building a business from one country to seven, I see an impressive company in Cineworld and a good fit with Cinema City." Cinema City will retain its Warsaw listing. The tie-up creates a tidy solution to Cineworld's search for a new boss, following the decision of founding chief executive Steve Wiener to step down after 44 years in the business. Mooky Greidinger, Cinema City's chief executive since 1984, will lead the merged company. Greidinger took Cinema City into central Europe in the late 1990s, just as cinema visits began to rise in these countries. Between 2009 and 2012 Cinema City revenues grew by around 14% and operating profit by 15% to around €22.5m (£18.6m).
He said: "After nearly four decades in the cinema industry building a business from one country to seven, I see an impressive company in Cineworld and a good fit with Cinema City." Cinema City will retain its Warsaw listing.
Cineworld has also been expanding in the UK, although the recent acquisition of independent chain Picturehouse did not go entirely to plan. Last year competition authorities announced that Cineworld must sell off three outlets to avoid restricting consumer choice in some towns.Cineworld has also been expanding in the UK, although the recent acquisition of independent chain Picturehouse did not go entirely to plan. Last year competition authorities announced that Cineworld must sell off three outlets to avoid restricting consumer choice in some towns.
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