Viacom Sells Famous Players to Cineplex Galaxy

Viacom is selling its Canadian theater chain Famous Players to Cineplex Galaxy for about C$500 million (US $400 million). Famous Players has been around for 85 years.

The Canadian Competition Bureau has already approved the transaction, and it is subject to the terms of a consent agreement entered into with the Competition Bureau.

The deal is expected to be completed in the third quarter of this year. It is subject to customary closing conditions. Viacom was advised by Lehman Brothers and Citigroup in the transaction.

“Working in conjunction with Onex Corp., our largest unit holder and controlling partner, we are bringing together two great companies and are creating an exceptional opportunity to build value through an improved cost structure and expanded product offerings,” said Cineplex Galaxy President and CEO Ellis Jacob. According to Tavia Grant of Globe and Mail,

Cineplex Galaxy Income Fund holds about 42 per cent of Cineplex Galaxy LP, while Toronto-based leveraged buyout firm Onex and other shareholders hold the balance. Onex currently owns 31 per cent of the outstanding income trust units and has a 100 per cent voting interest…

Canada’s competition bureau gave a green light for the move, provided Cineplex sell some theatres. The theatres to be divested are in Victoria, Vancouver, Calgary, Edmonton, Lethbridge, Saskatoon, Winnipeg, London, St. Catharine’s, Kitchener, Hamilton, Kingston, Ottawa, Toronto, Gatineau, Montreal and Quebec City.

The company operates a total of 81 locations with 787 screens across the country, including theaters in its joint venture with IMAX and its partnership with Alliance Atlantis. Famous Players is Canada’s top grossing theatrical exhibitor.

Viacom Chairman and CEO Sumner Redstone said, “Today’s announcement marks the coming together of two strong and innovative theatre chains to create one of North America’s leading theatrical exhibition businesses.”

“As Canada’s top grossing chain with a superb management team in place, Famous Players has always been an important part of the Viacom family of businesses,” added Redstone. “Although we part now as we refine our strategic focus on our core content creation engines, we have no doubt that Famous Players will make a significant and positive contribution in this new combined operation.”

Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.