CJ CGV, Partners to Pay $688 Million for Mars Cinema

  • Deal gives CJ CGV a stake in Turkey's largest cinema chain
  • Unidentified investors agree to buy remaining shares

South Korea’s largest operator of multi-screen theaters and its unidentified partners agreed to pay 605 million euros ($688 million) for Mars Cinema Group, adding Turkey’s biggest cinema chain to its global network.

CJ CGV Co. will acquire 38.12 percent of Istanbul-based Mars, with the remaining shares to be bought by multiple investors, according to a regulatory filing from CJ CGV on Monday. The South Korean company didn’t identify the other investors in the filing.

The transaction means Mars Cinema Group, which owns 83 multiplexes with 736 screens under the Cinemaximum brand in Turkey, has an enterprise value, or market capitalization plus debt, of $800 million, the buyers and sellers said in a joint e-mailed statement. The deal brings the South Korean company closer to its target of operating 10,000 screens globally by 2020. The unit of South Korea’s CJ Group has said it is also considering buying the U.K.-based Odeon & UCI cinema chains from Terra Firma Capital Partners.

The sellers, advised by Goldman Sachs Group Inc. and Morgan Stanley, are the Turkish private equity firms Esas Holding AS and Actera Group which own a combined 69.5 percent, as well as founding partners Muzaffer Yildirim and Menderes Utku, who own the remainder. The sale is expected to be closed in May, according to the statement. Citigroup Inc. represented CJ CGV in the deal.

Potential Bidders

Chinese billionaire Wang Jianlin’s Wanda Cinema Line Co. and investors from the U.S., Mexico, U.K. and Japan were among potential bidders for Istanbul-based Mars, three people with knowledge of the plan said Feb. 25.

CGV already operates 249 multiplex theaters with a total of 1,853 screens in South Korea, the U.S., China, Vietnam, Indonesia and Myanmar. CJ Group is among the family-run conglomerates known locally as the chaebol, that dominate South Korea’s corporate landscape. CJ was formerly part of the Samsung Group, and it has been led by Samsung family members even after separating in 1993.

CJ sales reached 29.1 trillion won ($25 billion) in 2015. The company targets 100 trillion won in revenue by 2020, with 70 percent coming from overseas.

Demand for movies is rising in Turkey, where cinema ticket revenue jumped 23 percent last year, according to state statistics office data. The number of theaters nationwide increased 3.2 percent, the data show.

(A previous version of this story was corrected in the first paragraph and headline to show that CJ CGV and its partners will be paying for the full stake in Mars Entertainment.)

(Corrects first deck headline, third paragraph to remove reference to gym franchise, which isn't included in the sale, for story published on April 4.)
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