Vue Group (CinemaxX) can acquire Cinestar cinemas subject to conditions

The Bundeskartellamt has today cleared the merger between the cinema chains CinemaxX and Cinestar subject to the condition that the cinema operators divest cinemas at six different locations to other operators before implementing the merger.

The Bundeskartellamt’s decision refers to the acquisition of Edge Investments B.V., Amsterdam/The Netherlands, 2015 First Holding GmbH and Greater Union International GmbH, each based in Lübeck, by Vue Nederland B.V., Amsterdam. Vue Nederland B.V. is part of the internationally active cinema operator Vue, which operates 31 cinemas in Germany, 30 of them under the "CinemaxX" brand. The target companies operate 53 cinemas in Germany, 51 of them under the "Cinestar" brand.

Andreas Mundt, President of the Bundeskartellamt: “The merging of CinemaxX with the Cinestar cinemas will create a leading cinema operator in Germany in terms of turnover and number of cinema screens. We have examined the competition situation in the regions affected to find out if cinema viewers will still have sufficient local alternatives to choose from after the merger. In six regions the acquisition would have meant that the large share of the cinema offering would be provided by a single company in future. Such an impediment to competition can create disadvantages for consumers. To address our concerns the operators of the CinemaxX and Cinestar cinemas have undertaken to sell a cinema in each of these regions to competitors.”

Due to the overlaps in the catchment areas of the individual CinemaxX and Cinestar cinemas, the Bundeskartellamt has closely examined the market conditions in local cinema viewer markets in altogether nine regions. The results of this assessment showed that the acquisition would have led to high joint market shares and a significant impediment to effective competition in six regions - Augsburg, Bielefeld/Gütersloh, Bremen, Magdeburg, Wuppertal/Remscheid and in the western part of the Ruhr region. The CinemaxX and Cinestar cinemas have significant joint market shares in the regions of Berlin, Frankfurt/Offenbach and Hannover as well. However, due to the presence of strong rival cinemas in these regions, competition is not expected to be significantly restricted.

The acquisition raises no competition concerns on the procurement market, i.e. in the relationship between the cinema operators and film distributors. The internationally active Hollywood studios Disney/Fox, Sony, Universal and Warner are major players on the film distribution side. Together they account for very high shares in the film sales market in Germany. Even if the merger between CinemaxX and Cinestar creates the leading cinema operator in the market for the demand for films in Germany, this side of the market will remain much less concentrated even after the merger than the supply side represented by the film distributors.

In order to prevent a prohibition of the merger, the parties have undertaken to sell a cinema in each of the problematic markets to a competitor within a six-months period. According to current plans, these are the Cinestar cinemas in Augsburg, Bremen, Gütersloh, Magdeburg and Remscheid and the CinemaxX cinema in Mülheim an der Ruhr. The Bundeskartellamt’s clearance of the merger will only become effective once these or other cinema locations suitable to resolve the competition problems are sold.