mm2 Asia has revealed plans to acquire Cathay Cineplexes for SG$230 million. The move will see the group acquiring Cathay Organisation’s entire Singapore cinema operations and the “Cathay” brand. The acquisition is also reflective of mm2 Asia’s planned strategic expansion of its cinema business, a press statement read.
The move will see the mm2 Asia owning both cinemas in the Singapore and Malaysia markets. Currently, Cathay Cineplexes operates cinemas across eight locations in Singapore. Meanwhile, the Cathay’s cinema business in Malaysia is operated by mm2 Asia’s wholly-owned subsidiary, mm2 Screen Management. The acquisition is targeted to be completed on 24 November 2017.
The statement added that employees of Cathay Cineplexes business will be retained. Meanwhile, both parties will enter a management and consultancy agreement for the seller to provide management services. This is for a period of six months from the date of completion to ensure a smooth transition.
Melvin Ang, executive chairman of the mm2 Asia, said that the company’s continued diversification from production to cinema operations is part of its strategic growth plan.
"Many Singaporeans grew up with the highlight of their weekend or school holiday being a visit to Cathay cinemas. The Cathay name is very much a part of Singapore's history, and mm2 is proud to be entrusted with the Cathay legacy,” Ang added.
Cathay Organisation’s managing director, Choo Meileen, said in a press statement that Cathay cinemas has “met and weathered many challenges from within and from without and survived”.
“However, the environment has changed, and for an entertainment company to survive today, it needs to extend its reach broadly - into production, distribution, internet channels, cinema, events, concerts, new platforms on telcos, etc,” Choo added. As such, big is better to meet future challenges.
“To ensure Cathay’s future, we came to the very difficult decision to let go of the grown child, to allow it to embrace bigger and better things,” Choo added. Cathay Cineplexes was founded in 1935 in Singapore by Loke Yew and her son, Dato Loke Wan Tho.
Prior to its latest acquisition, mm2 Asia attempted to acquire a stake in cinema Golden Village for SG$184 million from Dartina, a company which operates GV Cinema business in Singapore. It also acquired the cinema management and operations business of Lotus Fivestar Cinemas in 2016 for 13 cinema locations for a purchase consideration of RM118 million. In 2015, the company also completed the acquisition of Cathay Cineplexes business operations at two locations in Malaysia for RM40 million (SG$13.8 million). The acquisition was done through the company’s wholly owned subsidiary, mm2 Screen Management.