AMC Theatres announced that it has entered into a definitive agreement to acquire the largest theatre exhibitor in seven countries in the affluent northern region of Europe, Stockholm-based Nordic Cinema Group Holding AB (“Nordic”). Nordic operates 68 theatres and has a substantial minority interest (approximately a 50% ownership) in another 50 associated theatres to which Nordic provides a variety of shared services. Nordic’s theatres are number one in market share in Sweden, Finland, Estonia, Latvia and Lithuania. Nordic currently is number two in market share in Norway, and with a new theatre currently under construction in Norway and scheduled to open next year, is expected to increase market share in Norway to number one as well. Nordic also has theatres in Denmark.
AMC is purchasing Nordic from European private equity firm Bridgepoint and Swedish media group Bonnier Holding in an all-cash transaction valued at SEK 8,250 million ($929 million USD)1.
The transaction is conditional upon antitrust clearance by the European Commission, which is expected to be received in the first half of 2017.
Nordic has 68 theatres, 463 screens, and approximately 68,000 seats in nearly 50 large and medium-sized cities in the Nordic and Baltic nations, and a substantial minority investment in another 50 associated theatres with 201 screens, to which Nordic provides a variety of shared services. Nordic is the largest theatre operator in the Nordic and Baltic countries. All Nordic activities are conducted locally in seven markets under several brands, including SF Bio in Sweden, SF Kino in Norway, Finnkino in Finland, and Forum Cinemas in Estonia, Latvia, and Lithuania. Additional associated theatres also operate in Denmark. Nordic had approximately SEK 2,938 million ($349 million USD)2 of revenue in 2015, including box office revenues of SEK 1,928 million ($229 million USD)2. Total revenues for the twelve month period ended September 30, 2016 were SEK 3,159 million ($375 million USD)3 and Nordic operating margins for that twelve month period exceeded those of AMC.
Nordic will maintain a Stockholm headquarters location, but will operate as a subsidiary of London-based Odeon Cinemas Group, which AMC acquired in November of 2016. As of today, Odeon operates 243 theatres with 2,262 screens in the U.K., Ireland, Germany, Austria, Italy, Spain and Portugal under the Odeon, Cinesa, UCI and UCI Kinowelt brands. Odeon Cinemas has the number one market share in the U.K. & Ireland, Italy and Spain, the number two market share in Austria and Portugal and the number four market share in Germany. In total, Odeon is already Europe’s largest cinema operator. When combined with Nordic, Odeon’s scale and market position across Europe is expected to grow markedly, as AMC’s European theatre operations will increase to 361 theatres and 2,926 screens.
Including the associated theatres, the combination with Nordic will result in AMC’s hitting the never before reached milestones of 1,000 theatres and 11,000 screens in 15 countries. This will further strengthen AMC’s current position of being the largest cinema operator in the United States, the largest cinema operator in Europe and the largest cinema operator in the world.
“For the third time in the past twelve months, we believe we have discovered a substantial acquisition that gives AMC yet another opportunity to further expand and diversify our geographic reach and more firmly establish AMC as the undisputed leader in movie exhibition worldwide,” said AMC CEO and President Adam Aron. “It has been our observation that Nordic is extremely well-run with a modern up-to-date theatre circuit that in our opinion offers tremendous value potential for AMC over the foreseeable future. We are also excited by the growth potential of Nordic as it moves forward with 10 theatres already in development or re-development. We have been impressed with Nordic’s talented leadership team, and further believe that their added expertise will be invaluable to us in helping to drive AMC’s progress across Europe. AMC will bring additional efficiencies of scale and innovative strategic initiatives to the Nordic brands. At the same time, we will ensure that these theatres continue to be operated by locally-experienced theatre managers and country leadership teams who understand how to serve the communities and countries where they live and work.”
“As one of the largest cinema operators in Europe, Nordic has been an industry pioneer. Working with Bridgepoint, it opened a new flagship cinema in the Stockholm region, introduced new cinema experiences to its customers such as the first Nordic IMAX theatre, three Scape premium large format screens and improved food and beverage offerings across its network. Now, as the undisputed cinema group leader in the Nordic region and the Baltics, the business is well placed for further growth under new ownership and as part of the AMC group,” said Mika Herold, Director at Bridgepoint.
“AMC is the world’s leading movie exhibitor and we are proud to have caught their interest. They will be a perfect owner for Nordic. They share our long and successful history and our commitment to creating best-in-class movie experiences. AMC will bring valuable resources and expertise that will enable us to continue to innovate, grow and provide our customers with even greater movie experiences,” said Jan Bernhardsson, President and CEO of Nordic Cinema Group.