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Competition Bureau concerns result in changes to proposed movie theatre merger

OTTAWA, October 10, 2013 — The Competition Bureau announced today that it will not challenge the proposed acquisition by Cineplex Inc. of 24 movie theatres from Empire Theatres Ltd. The decision comes after Cineplex withdrew its plans to acquire two additional theatres from Empire in light of competition concerns identified by the Bureau.

On June 27, 2013, Cineplex announced that it would be acquiring Empire’s 24 movie theatres in Atlantic Canada, as well as Empire’s two theatres in Whitby and Kanata, Ontario. However, following a three-month review, the Bureau determined that the proposed acquisition of the Empire theatres in Whitby and Kanata would likely lead to a substantial lessening of competition in those markets. After the Bureau advised Cineplex and Empire of its concerns, the parties revised their transaction to exclude the two Ontario theatres. Empire subsequently found an alternative buyer for those theatres that did not raise competition issues.

Under the revised transaction, Cineplex will acquire all of Empire’s movie theatres in Atlantic Canada, where Cineplex currently does not operate. Under a separate transaction, Landmark Cinemas will acquire the Kanata and Whitby locations, in addition to 20 of Empire’s movie theatres in Western Canada and Ontario, in markets where Landmark does not currently have a significant presence.

"This resolution was the result of a focused review and timely, clear and transparent dialogue with the parties regarding our concerns. I am pleased that the parties stepped forward and took the necessary steps to address the issues we identified," said John Pecman, Commissioner of Competition. "This type of co-operation can substantially expedite the review process and avoid the costs and delays of litigation or protracted settlement discussions."

Accordingly, the Bureau has issued a No Action Letter (NAL) to Cineplex with respect to the proposed transaction. A NAL confirms that the Bureau has reviewed a specific proposed merger and concluded that it will not, at this time, challenge that proposed transaction before the Competition Tribunal under the merger provisions of the Competition Act.

Mergers in Canada are subject to review by the Bureau under the Competition Act to ensure that they will not result in a substantial lessening and/or prevention of competition. The merger review process involves collecting information from, and conducting interviews with, a wide range of industry participants, including the parties, suppliers, competitors, customers and industry experts.

The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

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