Cineworld set to buy about 100 multiplexes in eastern Europe, finalises new management team.

UK exhibitor Cineworld is set to buy about 100 multiplexes in eastern Europe and Israel in a deal worth about £500m.

Cineworld is buying the outlets from exhibitor Cinema City International (CCI), which operates in seven countries across Central and Eastern Europe and Israel.

The deal marks the UK company’s first acquisition outside the UK and Ireland.

The UK company will pay CCI £272m in cash, and has launched a £110m rights issue to help fund the purchase.

The combined group will have 201 sites and 1,852 screens. Under the deal, CCI will get a 24.9% stake in the merged business.

On completion, the management team of the enlarged group will comprise of representatives from both Cineworld and CCI: Cineworld’s Anthony Bloom will continue as chairman of the combined group, Mooky Greidinger, the current chief executive officer of CCI, will be appointed as chief executive officer; Cineworld’s Philip Bowcock will remain as chief financial officer; Israel Greidinger, the current chief financial officer of CCI will be appointed as chief operating officer.

The new board will comprise of ten directors, six from the existing Cineworld board together with Mooky Greidinger and Israel Greidinger and two new non-executive directors: Scott Rosenblum (CCI’s current chairman) and Arni Samuelsson (new independent director).

Cineworld’s CEO Steve Wiener announced his departure from the company in November 2013.

Cineworld operates five of the ten highest grossing cinemas in the UK and Ireland and last year acquired independent chain Picturehouse.

Competitor Vue agreed to buy Poland’s second largest multiplex operator Multikino last year.

Commenting on the combination, Anthony Bloom, chairman of Cineworld, said:

“This is an exciting and unique opportunity for Cineworld to offer shareholders enhanced growth prospects and attractive returns via exposure to some of the most promising cinema markets in Europe. Mooky Greidinger will be joining us as CEO – he is a highly respected and very experienced cinema executive who enjoys international recognition. The board therefore unanimously recommends this proposed transaction with CCI.”

Greidinger added:

“After nearly four decades in the cinema industry building a business from one country to seven, I see an impressive company in Cineworld and a good fit with Cinema City. Together with the rest of the proposed management team I intend to seize this opportunity to bring together two equals in size, both leading players in their respective countries, and lead the resulting business to continuing growth, innovation and dedication to the best possible customer experience.”