AMC Entertainment will acquire Carmike Cinemas in a deal valued at about $1.1 billion, including debt, making the combined company the largest U.S. theater chain.
The purchase will transform the two regional players into a cinema operator with a national footprint, AMC CEO Adam Aron told CNBC's "Squawk on the Street" on Friday.
Carmike tends to serve smaller cities in the South and Southeast, while AMC is concentrated in large cities, primarily in the Northeast, Midwest and West, he said.
Share prices of Carmike jumped more than 16 percent in trading following the announcement. AMC's stock was up more than 2 percent.
Aron said he believes the deal will close by the end of the year, positioning AMC to capture momentum at the box office and take advantage of a strong slate of movies in 2017 and 2018.
"In three of the past four years, Hollywood has had record box offices," he said. "We're actually expecting a reasonably robust box office in the U.S."
Disney's "Star Wars: Episode VII - The Force Awakens" became the highest grossing U.S. release after its December release, and 21st Century Fox's "Deadpool" smashed opening weekend records for the month of February.
