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Loews-Cineplex Merger OKd After Sell-Off Pact

April 17, 1998| From Associated Press

WASHINGTON — The Justice Department approved the merger of Loews Theatres and Cineplex Odeon Corp. after winning their agreement Thursday to sell 25 movie theaters in metropolitan Chicago and New York's borough of Manhattan.

"This is a big win for moviegoing consumers," said Assistant Atty. Gen. Joel I. Klein, head of the department's antitrust division.

The government said the original deal would have driven up movie-ticket prices and reduced the quality of first-run theaters in both cities, where the two firms run the largest and second-largest chains.

Joined by the attorneys general of New York and Illinois, Klein's division filed a lawsuit Thursday in U.S. District Court in New York to block the merger. At the same time, the prosecutors filed the divestiture agreement, which would settle that lawsuit if the court approves it as expected.

The theaters to be sold include such prominent houses as Ziegfeld and Chelsea in Manhattan; and 600 North Michigan and the Watertower in Chicago.

"This divestiture completely restores the competition that would have been lost," Klein said. "Under the settlement, the merged firm will not be any larger in either market than the leading firm was before the transaction."

The proposed settlement was praised by New York City Public Advocate Mark Green, who had gathered 7,000 signatures on petitions opposing the original deal, which he had predicted would drive Manhattan movie tickets to $15 apiece.

"Whoever thought the small guy won only in the movies was wrong," Green said.

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