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Mexico's Cinepolis eyeing takeover of Reliance Big Cinemas to tap India's multiplex market

Move could pit Cinepolis against PVR, which spurned a takeover offer last year, says Forbes India
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An Indian man walks past a poster of the Oscar nominated film 'Slumdog Millionaire' in New Delhi on January 23, 2008. (Manan Vatsyayana/AFP/Getty Images)

Here's another good one from Forbes India: Mexico's Cinepolis, the fourth largest movie theater company in the world, is in talks to buy Reliance's Big Cinema business to tap India's fast-growing movie market.

As you read this, a team from Cinepolis is carrying out a due diligence of Anil Ambani’s Big Cinemas, the largest player in the domestic market by screen count. If the two players agree on the valuation, the transaction could lead to a merger of the two companies with the Mexican major taking operational control. Big Cinemas is a unit of the Bombay Stock Exchange-listed Reliance MediaWorks (RMW) and its 500 screens are divided almost equally between India and overseas markets.

If a deal materializes, it could have a massive impact on one of India's most successful cineplex firms, PVR Cinemas, Forbes says:

There’s one person who has his eyes peeled on every move that Cinepolis makes in India. Ajay Bijli, the chairman and managing director of PVR Cinemas, started the multiplex culture at Saket, New Delhi, 15 years ago. Today, Bijli’s high quality product will be challenged by a global player with a formidable reputation of bringing in cutting-edge innovations.

It isn’t widely known that Cinepolis had approached Ambani after talks with Bijli broke down last year. Bijli even made a trip to Mexico on the invitation of the Cinepolis CEO. But when asked, he chooses to downplay the visit. “Cinepolis was kind enough to invite me to Mexico. The visit was more to gauge the competition,” he says. However, a top official at Cinepolis India confirmed that the two sides had discussed a potential investment by the South American company in PVR. “But every entrepreneur thinks his baby is priceless,” the official says. The two sides couldn’t eventually agree on a valuation.

A pretty fascinating chapter in the story of increasing South-to-South investment -- and competition.

http://www.globalpost.com/dispatches/globalpost-blogs/india/mexico-cinepolis-india-reliance

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