Cineplex Galaxy takes over Viacom theatres in Canada

Cineplex Galaxy LP, a Canadian-headquartered theater exhibition chain, has agreed to purchase Viacom's Famous Players chain for C$500 million (US$400 million), "combining Canada's two largest movie-theatre companies," according to a report in the Globe and Mail. The deal will make Cineplex Galaxy easily the largest exhibitor in Canada. (See here for the CBC report.)

A deal had been expected since New York-based Viacom had announced its plans last fall to sell Famous Players, described in the report as "the largest movie exhibitor in [Canada] with a market share of about 40 per cent." Apparently "industry observers have seen Cineplex, with a 31-per-cent share, as a top contender for the unit."

Canada's competition bureau gave the go-ahead for the purchase, provided Cineplex divest itself of some theaters. "As part of the transaction, Cineplex Galaxy will comply with a Competition Bureau stipulation that the company sell 35 theatres with annual box office revenues of almost C$100 million."

If my math is correct, the expanded Cineplex Company will still control 135 theaters across Canada, compared to 86 before the deal. That still sounds like quite a bit of concentration of ownership.