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Tuesday, December 15, 2015

Justice Department Requires AMC Entertainment to Divest Two Movie Theaters in Order to Complete Acquisition of Starplex Cinemas

Theater Divestitures Will Preserve Movie Theater Competition in Connecticut and New Jersey 

The Department of Justice announced today that it has reached a settlement with AMC Entertainment Holdings Inc. and SMH Theatres Inc. (Starplex Cinemas) that requires AMC to divest movie theaters in Connecticut and New Jersey, in order to proceed with its $172 million acquisition of Starplex Cinemas. 

The Antitrust Division and the State of Connecticut filed a civil antitrust lawsuit today in U.S. District Court for the District of Columbia to block the proposed acquisition.  At the same time, the department and the Connecticut Attorney General filed a proposed settlement that would resolve the competitive concerns alleged in the lawsuit.

“Consumers have benefitted from the competition on price and on quality of the viewing experience between AMC’s and Starplex Cinemas’ theatres in Berlin, Connecticut, and East Windsor, New Jersey,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “The divestiture of two theatres in those areas ensures that movie theater competition is preserved.”

AMC’s and Starplex Cinemas’ theaters in the Berlin, Connecticut, and East Windsor, New Jersey, areas compete to attract moviegoers on ticket prices as well as through the quality of the viewing experience, such as by offering moviegoers the most sophisticated sound systems, largest screens, best picture clarity, premium seating, and high quality food and drink.  Because AMC and Starplex Cinemas are each other’s most significant competitor in the Berlin and East Windsor areas, the proposed acquisition would likely reduce price competition as well as the overall quality of the movie viewing experience. 

Under the terms of the proposed consent decree, the Starplex Town Center Plaza 10 in East Windsor, New Jersey, and the Starplex Berlin 12 in Berlin, Connecticut, must be divested to a buyer or buyers approved by the United States.

AMC, a Delaware corporation, operates 349 theaters with a total of 4,975 screens in locations primarily throughout the United States.  Its U.S. box office revenues were approximately $1.8 billion in 2014. 

Starplex Cinemas, a Dallas-based company, owns and operates 33 movie theaters with a total of 346 screens in 12 states.  Its U.S. box office revenues were approximately $57 million in 2014. 

As required by the Tunney Act, the proposed settlement and the department’s competitive impact statement will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement during a 60-day comment period to David C. Kully, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 4000, Washington, D.C. 20530 (telephone: 202-305-9969).  At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed consent decree upon finding that it serves the public interest.

AMC Complaint (185.57 KB)

AMC CIS (83.43 KB)

AMC Hold Separate (160.41 KB)

AMC Explanation (80.16 KB)

AMC PFJ (73.47 KB)

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Topic: 
Antitrust
Updated February 4, 2016