Cinema group Cineworld is in talks to buy US peer Regal Entertainment Group for approximately $3.6 billion in cash, the companies have said. 

A deal between the two would put the combined company in a better position to take market share from US industry leader AMC Entertainment Holdings.

It would also give it more scale to fight increasing competition from Netflix, Apple and other digital outlets. 

Regal said in a statement that Cineworld's all-cash offer values it at $23 per share, confirming an earlier Reuters report. 

No agreement has been reached and there is no assurance that any transaction will result, Regal added. 

Cineworld added in a separate statement that it was in advanced discussions to acquire Regal and was finalizing due diligence on its offer. 

Cineworld said it would finance its bid through a "mixture of incremental debt and a material equity raise by way of a rights issue, including a commitment to full subscription" from its largest shareholder, Global City Holdings. 

Global City Holdings is a Polish holding company that owns entertainment and real estate businesses in Europe and Israel. Global City owns 28% of Cineworld, according to Thomson Reuters data.

Regal has a market value of about $3 billion, while Cineworld has a market value of $2.5 billion.

Regal Entertainment, which owns 561 cinemas with 7,315 screens, hired an investment bank in 2014 to explore strategic alternatives, including a potential sale, but later shelved those plans. 

Cineworld bought Cinema City to become Europe's second-largest cinema chain in 2014. 

It operates 2,049 screens across 221 sites in Britain, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.

The last major deal in the sector was in December 2016, when AMC completed its acquisition of Carmike Cinemas for about $1.1 billion. 

AMC also acquired Europe's largest cinema chain, Odeon, for $1.2 billion last year.