Jun 13, 2020

Cineworld abandons $2.3bn Cineplex purchase

Cineworld, the world's second-largest cinema chain, called off a $2.3bn deal to buy the Canadian cinema company Cineplex on Friday saying that Cineplex had suffered a "Material adverse effect", which meant the acquisition could not go ahead. Under the terms of the deal, the sale would not proceed if Cineplex breached $725m in debt. Cineplex claimed that it had not breached the sale agreement and "That a material adverse effect has not occurred". The smaller cinema chain also claimed that Cineworld had not complied with the requirements needed in order for the deal to receive approval from the Canadian competition authorities. In a statement on June 1, Cineplex issued a note of caution saying that there could be can be "No assurance" that the terms required for the deal to complete would be met. The UK-listed cinema group, which runs 787 cinemas worldwide, said that contrary to Cineplex's claims it had complied with the Canadian authorities and would "Vigorously defend" the allegations against it.

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