The Office of Fair Trading said Sept. 23 it has referred the completed acquisition of A3 Cinema and its subsidiary Ster Century (U.K.) by U.K.-based exhibitor Vue Entertainment to the Competition Comm


LONDON (The Hollywood Reporter) -- The Office of Fair Trading said Sept. 23 it has referred the completed acquisition of A3 Cinema and its subsidiary Ster Century (U.K.) by U.K.-based exhibitor Vue Entertainment to the Competition Commission.

The OFT raised concerns that the combination of the Vue and Ster Century cinema chains in certain areas "may be expected to lead to a substantial lessening of competition to the detriment of cinemagoers."

The OFT also decided that the parties have not given satisfactory divestment undertakings to address all the competition concerns arising from the merger and that the transaction will therefore be referred to the CC.

"Recent cinema merger cases where local competition concerns were found to exist were not referred to the CC because the parties offered to divest cinemas to meet all such concerns," OFT chairman John Vickers said in a statement. "In this case, however, the parties have not offered divestments that meet all concerns, so the merger needs full investigation by the CC."

The CC is expected to report by March 2006.

Recent cinema merger cases examined by the OFT include the acquisition by Terra Firma of United Cinemas International (U.K.) and Cinema International Corporation and the acquisition by the Blackstone Group of UGC Cinemas. Both escaped scrutiny by the CC because of undertakings to divest theaters in certain areas.