Corporate & Securities Law

DOJ Protects North Carolina Moviegoers

By Matthew S. Wild

On April 30, 2008, the Antitrust Division conditioned its approval of an acquisition by Regal Cinemas, Inc. of Consolidated Theater Holdings GP on divestitures in Southern Charlotte, Northern and Southern Raleigh and Asheville. On January 14, 2008, Regal — with $2.6 billion in revenue last year — agreed to acquire Consolidated — with $144 million in revenue last year — for $210 million. The Antitrust Division alleged a product market of the exhibition of first-run commercial movies. With respect to the geographic markets, the Antitrust Division alleged that moviegoers in Southern Charlotte, Northern and Southern Raleigh and Asheville would be unlikely to travel a significant difference in response to a small but significant non-transitory increase in price. The relevant markets were highly concentrated with HHIs ranging from 6058 to 6523 and deltas exceeding 2,000 except for Southern Raleigh where the transaction would be a merger to monopoly. The Antitrust Division also alleged high entry barriers because the demographics of these geographic markets would not support the sunk costs associated with opening a new theater. Attached are the DOJ Press Release and Competitive Impact Statement. Regal (DOJ Press Release); Regal (Competitive Impact Statement)

Full post as published by Antitrust Commentary on May 05, 2008 (boomark / email).