Empire Company Ltd. (TSX:EMP.A) is getting out of the movie theatre business to focus on its Sobeys grocery store chain in a move the company says will have minimal impact on earnings.

That's because Empire will pay down debt with the $255 million in proceeds from deals to sell 46 theatres to Cineplex and Landmark Cinemas, the Nova-Scotia based company said Thursday.

"The decision, as difficult as it has been, aligns with the strategic direction of the company to focus our resources on our food retailing businesses," said Empire president and chief executive Paul Sobey.

Canada's largest cinema company, Cineplex Inc. (TSX:CGX), will pay $200 million in cash to acquire 26 of the theatres -- 24 in Atlantic Canada and two in Ontario.

The sale will give Cineplex 78 per cent of the Canadian movie theatre business, as well as a presence in Canada's four most eastern provinces.

The theatres that Cineplex is acquiring generated $113 million in total revenue in 2012, RBC analyst Haran Posner said in a note, declaring the transaction "modestly accretive."

Cineplex bought four theatres from AMC Entertainment Inc. last year after the Missouri-based company said it wanted to focus on its U.S. operations.

Landmark Cinemas will acquire 20 Empire theatres in Ontario and Western Canada for up to $55 million.

Landmark will pay $31 million cash, plus equity in a new entity worth $19 million, as well as an earn-out right estimated to be worth $5 million. Landmark will have until the end of the year to buy back the equity from Empire for $19 million.

Empire shares closed down 34 cents at $79.28 Thursday on the Toronto Stock Exchange on Thursday afternoon, while Cineplex stock was up $1.44, or more than four per cent, at $36.47.

After the sales, Empire said it will have four theatres left over. Two of them -- in Victoria, B.C. and New Glasgow, N.S. -- will be sold as real estate.

Empire said it will decide what to do with the other two theatres, both in Ontario, when their leases expire in August and December. The company said it will likely sell those theatres as well, or close them.

"We're not going to be operating four theatres in three different provinces," said Empire spokesman Andrew Walker.

Empire also announced Thursday that it had $98.6 million or $1.45 per share of adjusted earnings in the fourth quarter -- up $9 million from a year earlier and eight cents per share above the consensus estimate.

The company's net income for the quarter ended May 4, before adjustments, was $107.4 million or $1.58 per share -- up from $92.1 million or $1.35 per share a year earlier.

Empire also boosted its quarterly dividend from 24 cents per share to 26 cents per share.

Sobey's gross margin declined to 23.46 per cent during the quarter, from 24.5 per cent a year ago, as competition forced the grocer to lower prices.

"Overall it's a very competitive market right now," Marc Poulin, president and CEO of Sobeys, said during a conference call Thursday. "We have to adjust pricing to remain competitive and to maintain our position in the marketplace."

After the quarter ended, Empire announced that it will pay $5.8 billion to acquire Safeway's Canadian grocery business -- adding about 213 grocery stores in Western Canada as well as in-store pharmacies, gas stations, liquor stores, distribution centres and 12 manufacturing plants.

Sobeys already owns or franchises more than 1,300 stores across Canada under several banners that include Sobeys, IGA, Foodland, FreshCo and Thrifty Foods.