By Jeffrey May, J.D.
The federal district court in Washington, D.C. has approved a proposed final judgment resolving antitrust concerns of the Department of Justice Antitrust Division and the State of Connecticut raised by AMC Entertainment Holdings Inc.’s $172 million acquisition of SMH Theatres Inc. (Starplex Cinemas). Under the terms of the consent decree, AMC was required to divest movie theaters in Connecticut and in New Jersey (U.S. v. AMC Entertainment Holdings, Inc., March 2, 2016, Howell, B.).
The Justice Department and the state filed a complaint on December 15, 2015, contending that the acquisition of the Dallas-based operator of 33 movie theaters by the country’s second-largest theater exhibitor, Kansas-based AMC, violated Section 7 of the Clayton Act. The settlement to resolve the antitrust concerns raised by the deal was also filed with the court on the same day. AMC announced the next day that it completed the acquisition, bringing the total number of AMC theaters to 379 with more than 5,260 screens, after the divestitures.
The government alleged that the proposed transaction, as initially agreed to by AMC and Starplex Cinemas, would lessen competition substantially in two local markets for the exhibition of first-run, commercial movies. The two relevant geographic markets are: (1) the area in and around East Windsor, New Jersey; and (2) the area in and around Berlin, Connecticut.
The consent decree required the parties to divest the Starplex Town Center Plaza 10 in East Windsor and the Starplex Berlin 12 in Berlin to buyers approved by the Justice Department. The settlement also prohibits AMC from reacquiring the assets during the 10-year term of the final judgment.
This is Case No. 1:15-cv-02181.
Attorneys: Gregg I. Malawer and Miriam R. Vishio for U.S. Department of Justice. Michael E. Cole for State of Connecticut. Michael B. Bernstein (Arnold & Porter LLP) for AMC Entertainment Holdings, Inc. Kay Lynn Brumbaugh (Andrew Kurth LLP) for SMH Theatres Inc.
Companies: AMC Entertainment Holdings, Inc.; SMH Theatres Inc.
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