Russia's Largest Cinema Operator, Cinema Park, Acquires KinoStar Cinema Chain 06.2011 June 2011 marks a moment of upheaval in the balance of power in the Russian cinema industry: Cinema Park announced that it had purchased a 100% ownership share of Rising Star Media, which manages the KinoStar cinema chain. According to the General Director of Cinema Park, Sergei Kitin, the two chains will be fully integrated by the end of 2011, with rebranding of the newly acquired cinemas to come at a later date. The acquisition was based on the outright purchase of KinoStar’s shares. The price of the deal has not been publicized. The acquisition has further bolstered Cinema Park’s position as the market leader, with 61 more screens than its closest rival, Karo Film. The deal is the largest public merger or acquisition of recent years. It heralds a new growth trend for the Russian cinema industry. Cinema Park currently leads the market with its number of screens. It operates 20 cinemas with 169 screens in the 15 largest Russian cities. Cinema Park is also the market leader in digital projection: the chain has 90 3D screens, including 5 IMAX facilities. In 2010, Cinema Park attracted 12 million viewers, reaching USD 120 million in sales revenues. Rising Star Media (part of the KinoStar brand) is a cinema chain serving Moscow and St. Petersburg, with 75 screens, four of which are IMAX. In 2010, the company's revenues exceeded USD 100 million. The market, however, remains fractured despite this union of two major players: the group will now control all of 0.5%. Currently, the top ten market players own 39.3% of modern screens, as compared to 38.8% at the start of 2011. At the same time, taking into account combined figures for Cinema Park and KinoStar for the start of 2011, the market concentration of box office receipts and number of screens for the three leading players (Cinema Park, Karo Film, and Kinomax) saw a significant increase. (The figures in brackets indicate market concentration without taking the merger into account): - cinemas – 10% (9%); - screens – 25% (18%); - box office – 25% (21%); - admissions – 32% (25%). Nevafilm DIGITAL™

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