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(Bloomberg) — Kinepolis Group NV, one of the largest theater operators in Europe, recently considered making a bid for Cineplex Inc., the No. 1 chain in Canada, but chose not to proceed after concluding a deal would struggle to win regulatory approval, according to people familiar with the matter.

Kinepolis may still pursue a deal if it can partner with another bidder to acquire some of Cineplex’s theaters, said the people, who asked not to be identified discussing nonpublic information. 

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Representatives for Kinepolis and Cineplex declined to comment.

Kinepolis, based in Ghent, Belgium, accounts for about 13% of Canadian movie ticket sales through its Landmark Cinemas subsidiary, while Cineplex has about 75% of the country’s box-office revenue, with 158 theaters.

With box-office sales languishing below pre-pandemic highs and some theaters closing, cinema operators have sought to reduce costs and grow via acquisitions.

Kinepolis was created by the 1997 merger of family-backed cinema chains Bert and Claeys. Eddy Duquenne, chief executive officer of Kinepolis since 2007, expanded into the North America market through the acquisitions of Landmark in 2017 for about C$123 million and Michigan-based MJR Digital Cinemas in 2019 for $152.3 million. 

Cineplex, run by Ellis Jacob, agreed to be acquired by Regal owner Cineworld Group Plc in 2019, just before the global pandemic shut down theaters. A Canadian court awarded Cineplex C$1.24 billion ($910 million) in damages from Cineworld over the companies’ broken merger, but the effort to recover payment stalled after Cineworld filed for bankruptcy. Cineworld emerged from bankruptcy court protection in July.

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