The deal means Cineworld becomes the world's second biggest cinema chain in terms of screen numbers.
Companies: Cineworld Group
Cineworld (LON: CINE) has confirmed it has agreed to the terms of the recent proposal to purchase US cinema chain Regal Entertainment in a blockbuster £2.7bn deal.
The acquisition opens up the Group's exposure to the North American market and means the Group becomes the world's second-largest cinema chain in terms of screen numbers, with a total of 9,542 screens spanning 10 countries in North America and Europe.
Management said it expects the acquisition to be:
"Strongly accretive to earnings in the first full year following Completion (FY 2019)" and "the Enlarged Group will be able to achieve annualised pre-tax combination benefits of US$100 million ( £74.5m) and additional annual structuring benefits of US$50 million (£37m)."
The acquisition will be funded by way of a rights issue as well as debt facilities and existing cash.
Commenting on the reverse takeover, Mooky Greindinger, CEO of Cineworld said:
"We have long had high respect for Regal and for its strong position in the largest box office market in the world and we are delighted that the Regal Directors have unanimously agreed to recommend our offer to their shareholders.
Regal is a great business and provides Cineworld with the optimal platform on which we can continue our growth strategy."
Despite the rise of online streaming services like Amazon and Netflix, the US box office market is still worth over US$10bn per year, making it the world's largest box office market.
Shares in Cineworld dove 20% when the Group confirmed last week the press speculation surrounding the takeover, with shares falling a further 4% today with news the deal had been given the green light.