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INDUSTRY UK

Cineworld’s acquisition of Picturehouse runs afoul of Competition Commission

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- Leading cinema group may be forced to sell three sites after Competition Commission concluded that the acquisition could lead to a lessening of competition

Cineworld’s acquisition of Picturehouse runs afoul of Competition Commission

The Cineworld Group acquired the City Screen Group that operated the Picturehouse cinemas in 2012. The UK Competition Commission (CC) in its inquiry into the deal has provisionally concluded that the acquisition could lead to a substantial lessening of competition in the three areas and therefore Cineworld may have to sell cinemas in those areas.

Alasdair Smith, CC Deputy Chairman and Chairman of the Cineworld/City Screen merger Inquiry Group, said, “We found that when setting the price of tickets, exhibitors take account of the prices of competing cinemas operating in their local area. We focused our detailed analysis on nine of the areas where Cineworld and City Screen/ Picturehouse compete, looking at the extent to which they compete with each other and with other cinemas. We found that there were three areas—Aberdeen, Bury St Edmunds and Cambridge—where they were in direct competition with each other, and faced limited competition from other cinemas so that the reduction of local competition could lead to higher prices for local cinemagoers. We will now look at ways we can restore competition and protect customers’ interests.”

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Cineworld CEO Stephen Wiener said, “We are disappointed that in these three locations we have been unable to convince the Competition Commission that Cineworld and Picturehouse are two fundamentally different businesses that could operate in the same area. Nevertheless the combination of the two businesses will remain strategically compelling, as our recent results showed clearly, and we are committed to continuing the expansion and investment into both.”

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