Cineworld Group Plc’s acquisition of City Screen Ltd. may reduce competition in five British cities, a U.K. antitrust regulator said.
The Office of Fair Trading said the deal may lead to higher prices and asked another regulator, the U.K. Competition Commission, to review the transaction.
Cineworld, which operates multiplex theaters, said that the two companies have very different identities, with City Screen focusing on smaller, arthouse cinemas.
“We are not surprised by the decision because this is the first time a complex cinema acquisition of this type (ie a multiplex cinema chain acquiring an Independent cinema chain) has been made,” the London-based company said in a statement.
“We believe the two businesses are fundamentally different,” Cineworld said. “We run the two brands separately and we are confident that we will be able to demonstrate that local competition will not be reduced.”