Cineworld to create world's second biggest cinema company following Regal acquisition

London-listed Cineworld has reached an agreement to buy US cinema chain Regal for $3.6bn (£2.7bn), both companies confirmed on Tuesday (5 December).

The deal would create the world's second biggest cinema operator with the combined might of more than 9,500 screens spread across US and Europe.

In a statement, Cineworld said it plans to sell shares and take on more debt to fund the deal.

The takeover, worth $5.8bn (£4.3bn) will not affect Cineworld's dividend plans. The acquisition price of $23.00 per Regal share values the entire issued, and to be issued share capital, of Regal at $3.6bn, with an implied total valuation of $5.8bn.

Commenting on the acquisition, Mooky Greindinger, chief executive officer of Cineworld, said:"Regal is a great business and provides Cineworld with the optimal platform on which we can continue our growth strategy. Both companies are strongly committed to bringing a high end cinematic experience to their customers.

"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. We strongly believe in our strategy which is to create 'The Best Place to Watch a Movie!'"

Amy Miles, chief executive officer of Regal, said: "We are excited to have reached an agreement with Cineworld, at a price that represents a meaningful premium on Regal's unaffected share price for our shareholders.

"Since becoming a public company, Regal has focused on delivering superior shareholder value, including return of capital in the form of regular and special dividends. We believe the transaction announced today provides compelling value for our stockholders.

"We believe this partnership with Cineworld will enhance Regal's ability to deliver a premium movie-going experience for customers and further build upon our strategy of introducing innovative concepts and premium amenities designed to enhance the value of our theatre assets."