At a time when most Americans say they would rather watch a movie at home, the country's second largest theater chain, AMC Entertainment Inc., announced plans Tuesday to acquire Loews Cineplex Entertainment Corp.

Despite banking blockbusters such as the final Star Wars episode and the prequel to Batman, movie theater ticket sales are down about 7 percent this year, according to Nielsen Entertainment, a company that measures box office tickets sales.

The merged company will have ownership or interests in about 450 theaters in 30 states and 13 countries.

The announcement that the billion dollar movie houses will combine comes as ticket sales are on a 17-week slide -- marking the worst low since 1985 when some of the best offerings included the lackluster "Pee-Wee's Big Adventure." A recent Associated Press-AOL News poll showed that nearly three-fourths of Americans would rather watch a movie from the comfort of their own homes.

But Brandon Gray, president of boxofficemojo.com, an online box office tracker, said it makes sense that AMC and Loews would pool their resources.

"The DVD boom has made watching movies more convenient and it seems that the time between theatrical release and DVD release is getting shorter and shorter," Gray said. "Theaters will have to band together to survive."

According to the same AP-AOL poll, 82 percent of Americans have DVD players.

That wasn't the case in 1995 when AMC reinvented the moviegoing experience with the megaplex and its stadium-style and better sound playing at theaters with 14 or more screens. Last year AMC reported a loss of more than $10 million.

AMC spokeswoman Pam Blase said the industry always has ups and downs.

"It's safe to say we're in a down cycle right now, but it will go up again and we will be there with a very strong company," Blase said.

She could not say if the merger would result in theater closings or layoffs, saying those details would be determined in coming months.

Michael L. Savner, an analyst with Banc of America Securities, expects an upswing in ticket sales in the second half of the year.

Savner also said in a research note that the nation's largest movie theater chain, Regal Entertainment Group, and the third-largest chain, Carmike Cinemas Inc., focus on different markets than AMC and Loews, so he does not expect the merger to result in "meaningful competitive implications."

The combined companies will keep the AMC name and will stay headquartered in Kansas City. It will be led by current AMC Chairman, CEO and President Peter C. Brown. Travis E. Reid, president and CEO of New York-based Loews Cineplex will co-chair an integration committee with Brown.

"There is still plenty of room for consolidation left in the industry," said Judy Russell, a spokeswoman for Carmike Cinemas based in Columbus, Ga.

Carmike has 2,489 screens in small to midsize markets in 37 states. Russell said there are a number of mom-and-pop operations and small chains that her company is looking to acquire.

Loews and AMC said the companies plan to refinance their debts to close the merger.

According to a Securities and Exchange Commission filing, Loews had $1.75 billion of total assets and $1 billion in total debt at the end of last year. AMC reported a loss of $10.7 million on revenue of $1.78 billion in 2004.

This is not the first time AMC and Loews have been in merger talks. They called off discussions in January of last year not long before a group of private investors purchased the publicly traded AMC for about $2 billion. Bain Capital, Carlyle Group and Spectrum Equity Investors also acquired Loews Cineplex from Onex Corp. and Oaktree Capital Management for $1.5 billion last year.