National CineMedia and Screenvision LLC Merger Face a Snag
The Department of Justice asked a federal court in New York to obstruct the merger plan of the two large movie house advertising companies of the nation on Monday.
National CineMedia Inc. has planned to go in for a $375 million takeover of Screenvision LLC. The companies are rivals who compete for advertisements that are shown in theatres just before the movies start.
Screenvision which is a company based in Manhattan and National CineMedia based in Centennial, Colorado says the merger will allow to provide the advertisers with a broader and a better product which will have an extended reach.
An official from the Justice Department said in a news release that the main reason for blocking this merger is an effort to prevent monopoly in the field. The companies in question are the only two such businesses in the country. He said that such a merger deal between the only two movie house advertising companies would be harmful for not only the movie theatres but also for the advertisers and the consumers.
According to the government the advertisements from the combined companies would be screened in eighty eight percent of the total number of U. S. movie theatres.
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