As far as cinema operators in Singapore are concerned, Golden Village (GV) and Cathay Cineplexes are popular choices among moviegoers.
However, news emerged on Wednesday (9 Dec) that the 2 companies may soon merge — a move that will see the formation of the largest cinema operator here.
However, the deal is subject to approval from several entities, including the Singapore consumer watchdog.
According to The Straits Times (ST), mm2 Asia – which owns Cathay’s 8 cinemas in Singapore – has entered a heads of agreement with GV over a possible merger.
A heads of agreement is a non-binding document that outlines the terms of a tentative partnership.
The merger would reportedly allow both companies to save cost through economies of scale and enjoy more stability during these uncertain times.
New investors will also be brought in by both firms to help inject funds into the proposed business.
If successfully merged, the combined business will reportedly be Singapore’s largest cinema operator with 22 theatres.
Covid-19 pandemic aside, the cinema sector has also been hit hard by consumers’ shift towards streaming apps and video content on social media platforms, reports Channel NewsAsia (CNA).
Through the merger, both GV and Cathay would be able to pool together their resources resulting in a “stronger platform for the operation of the cinema business”.
Significant hurdles, however, still stand in the way of the deal.
Firstly, shareholders of both mm2 Asia and Orange Sky Golden Harvest Entertainment – which owns GV – would have to approve the merger.
The deal would also have to be approved by both the Singapore Exchange and the Hong Kong Stock Exchange.
Finally, the consumer watchdog of Singapore would also have to give the green light for the merger to go through.
If both parties could not agree to a deal by 31 Dec 2021, the heads of agreement would be terminated.
Though there remain multiple obstacles in the way of the proposed merger, this goes to show the extent of the disruption that the cinema industry has faced as a result of technology.
Though the shift towards live-streaming apps appears to be inevitable, we hope cinema operators will eventually find a way to overcome these challenges and adapt in time to come.
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Featured image adapted from Google Maps and Great Deals Singapore.
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