Wanda's AMC to buy Carmike Cinemas chain

AMC Entertainment, the movie theater chain bought by Chinese conglomerate Dalian Wanda Group in 2012, is acquiring rival chain Carmike Cinemas for $1.1 billion, including debt, the companies announced on Thursday.

The acquisition will make the combined entity the largest theater chain in the world and signals Wanda's further expansion into entertainment.

It comes just two months after Wanda said it would spend $3.5 billion to acquire midlevel studio Legendary Entertainment, the co-financier of blockbusters like Jurassic World and The Dark Knight.

AMC will pay $30 a share, about 19 percent higher than the $25.11 that Carmike shares closed at Thursday.

AMC shares closed at $25.70, up 55 cents, on Thursday, and moved $1.90 higher after hours to $27.60.

Wanda is also behind a multibillion-dollar studio complex being built in eastern China that was used to shoot the upcoming movie The Great Wall.

The deal caps off a solid week for AMC, which reported on Monday that its fourth-quarter profit jumped some 40 percent to $41.6 million. The film Star Wars: The Force Awakens was a key factor for the increase. Revenue rose 10 percent to almost $784 million.

AMC's purchase price per Carmike screen comes to approximately $376,000. The combined entity will boost AMC's theater locations by more than 70 percent, to well above 600, and boost its screen count by half to nearly 8,400. Both boards approved the deal, which is expected to close by the end of the year.

Carmike is the fourth-largest movie chain in the US, with 2,954 screens to AMC's 5,426 screens.

Regal Entertainment, with 7,361 screens, was previously the largest distributor.

AMC CEO Adam Aron said in a statement that the move will enable about $35 million in annual savings.

"AMC also gets to extend the reach of our innovative, guest-experience strategies to further transform the movie-going experience for millions of new guests," Aron said.

He said the deal would help broaden AMC's reach with innovations such as "plush power-recliners, enhanced food and beverage, premium sight and sound, greater guest engagement and targeted programming".

"Our combination with AMC is a transformative milestone for Carmike and one that provides significant value to Carmike shareholders," said David Passman, Carmike president and chief executive officer. "By joining with AMC, we are bringing together two highly complementary theatre footprints and a shared commitment to service and innovation."

AMC Entertainment Holdings Inc is based in Leawood, Kansas. Carmike Cinemas Inc is headquartered in Columbus, Georgia.