Market Insight

Odeon UCI acquired by AMC

July 13, 2016  | Subscribers Only

David Hancock David Hancock Director – Research and Analysis, Cinema & Home Entertainment, IHS Markit
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The Odeon UCI cinema circuit has been acquired by US circuit AMC, itself majority-owned by China’s Dalian Wanda Group. AMC is to acquire Odeon UCI for £921m ($1.2bn) from Terra Firma private equity group, including taking on £407m ($536m) of debt. The deal is £500m for the equity (75% in cash and 25% in stock consideration), and the remainder in debt and employee incentive considerations. The circuit has been up for sale several times over the past few years, with the end line never quite being reached, and until the sale is finalised it is still possible that someone else could come in and make an offer. AMC expects attendance and revenue to increase in Odeon Cinemas, once its own guest experience strategies are implemented. It also expects to be able to exploit further opportunities, using Odeon UCI as a platform.

The sale makes AMC/Odeon the world’s largest cinema circuit, with 627 sites and 7,600 screens. If we include Wanda and Hoyts, then the group as a whole controls around 9,300 screens worldwide, well ahead of Regal Entertainment’s 7,300 screens. AMC is still in talks to acquire Carmike Cinemas, and committed on its side, but the sale has been put at ‘considerable risk’ by a disagreement over share price with some of Carmike’s shareholders.

Our analysis

The sale of Odeon is a long-running saga and this deal looks to have finally sealed the fate of Europe's largest exhibitor. AMC is part of the Wanda group, which includes screens in China (own screens and the recent acquisition of Shimao Cinemas), AMC in USA, Hoyts in Australia and now Odeon UCI in Europe: all major exhibitors in their part of the world and making Wanda the largest global cinema exhibition group. A proposed acquisition of US circuit Carmike is currently not decided. In addition, Wanda has built the world's largest film production studio in China and acquired Legendary Entertainment, a US producer of blockbuster features, as well as assets in big data, entertainment marketing and gaming distribution. The company is positioning itself to be the world's leading entertainment group across the value chain.


Dalian Wanda Odeon/UCI
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