Is Regal Cinema's $5.8 Billion Buyout a Risky Play?

U.K.-based Cineworld is making a bid to become the second-largest movie theater operator by buying U.S. rival Regal Entertainment (NYSE: RGC) in a $5.8 billion deal that would give it 9,500 screens across the U.S. and Europe.

The merger is part of a larger wave of consolidation that is occurring in theaters, mostly driven by China's Dalian Wanda Group, which purchased AMC Entertainment (NYSE: AMC) in 2012 for $2.6 billion, and then had the division snap up Europe's Odeon and UCI chains in November of last year, followed by U.S. operator Carmike Cinema in December. The buying spree ended up creating the world's largest movie theater operator, with over 900 theaters and 10,500 screens in eight countries.

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Source: Fool.com