Britain's Cineworld Group has agreed to buy US cinema operator Regal Entertainment Group for $3.6 billion in cash, the companies said today.
A deal would put the combined company in a better position to take on US industry leader AMC Entertainment Holdings.
It also give its more scale to fight growing competition from Netflix, Apple and other digital outlets.
The deal value of $23 per Regal share represents a premium of about 12% to Regal's closing price yesterday and implies an enterprise value - equity plus debt - of $5.8 billion.
Regal shares have risen 13.6% since Reuters first reported in November that Cineworld had approached Regal over a potential deal.
Cineworld said it expected the deal to "strongly" add to earnings in the first full year following completion, currently expected in the first quarter of 2018.
The combined company is expected to deliver pretax benefits of $100m, as well as additional annual benefits of $50m, the companies said.
Cineworld said it expected to fund the deal through a rights issue to raise about £1.7 billion, with the rest provided by committed debt facilities and existing cash.
The company also said it expects to be able to maintain its existing dividend policy after the deal closes.
