Major Japanese distributor and exhibitor Toho announced on Tuesday a deal with Virgin Cinemas Japan to acquire its chain of multiplex cinemas. The $83m (Y10bn) deal will take effect by the end of March.

Launched in September 1997, Virgin Cinemas Japan now operates eight multiplexes with 81 screens in suburban areas, while Toho manages 284 screens nationwide.

After acquiring Virgin theatres, Toho will become Japan's largest exhibitor with 365 screens, followed by Warner Mycal with 337 screens. "It will be Japan's number one cinema company," said Simon Wright, the CEO of Virgin Entertainment Group.

Celebrating its 70th anniversary this year, Toho plans to open a new multiplex in Sapporo by the end of 2003, which will boost its screen total to 395, including two new Virgin multiplexes. Toho and Virgin have especially high hopes for a new multiplex in Roppongi, a major Tokyo entertainment centre, that opens on April 25. "We believe it will be the highest revenue cinema in the world," said Wright. The multiplex will be located in one of the busiest areas of Roppongi and will remain open until 5:00 a.m. daily.

Although Virgin Entertainment Group has sold its cinema operation, the company plans to launch new mobile phone, health club and other businesses. "We have no plans to move out of Japan," said Wright.