Seoul: South Korean media giant JoongAng Group and retail conglomerate Lotte Group have signed an agreement to merge their respective affiliates that operate the country's third- and second-largest movie theater chains, Megabox and Lotte Cinema.
According to Yonhap News Agency, JoongAng Group announced that it signed a memorandum of understanding (MOU) with Lotte Group for the merger of Megabox JoongAng Inc. and Lotte Cultureworks. The joint venture will be co-managed by both companies, with plans to attract new investment and seek a quick review of the business combination by the Fair Trade Commission. Further details of the merger plan are to be decided through additional discussions.
JoongAng Group's entertainment arm, Contentree JoongAng, holds a 95.98 percent stake in Megabox JoongAng, while Lotte Group's Lotte Shopping owns an 86.37 percent stake in Lotte Cultureworks. JoongAng Holdings, the group's holding company, stated that the agreement was reached after discussions aimed at strengthening competitiveness and ensuring long-term sustainability in their cinema and film businesses.
Lotte Cultureworks operates Lotte Cinema, the movie distribution and investment firm Lotte Entertainment, and the Charlotte musical theater chain. Megabox JoongAng oversees the Megabox cinema chain, PlusM Entertainment, a film investor and distributor, and Playtime JoongAng, which runs indoor playgrounds for children. The merger is expected to reshape the domestic cinema industry by creating a significant competitor to CGV, the current market leader.
According to the Korean Film Council, CGV operated 1,346 screens nationwide in 2024, the most among the country's cinema chains. In comparison, Lotte Cinema had 915 screens and Megabox had 767, for a combined total of 1,682 screens, surpassing CGV. Industry watchers are closely monitoring the potential integration of Lotte Entertainment and PlusM Entertainment, both key players in South Korea's film distribution sector alongside CJ ENM, Showbox, and NEW.
The two groups expressed hope that the merger will help revitalize the domestic film industry, which has yet to fully recover from the impact of the COVID-19 pandemic.