In a move that could reshape the South Korea exhibition landscape, the country’s respective second- and third-largest exhibitors — Lotte Cinema and Megabox — are set to merge. Today, a memorandum of understanding for a tie-up of Lotte Cultureworks and Megabox Joongang, parent companies of Lotte Cinema and Megabox, was signed, per a statement posted to Lotte Group’s website.
In the statement (translated from Korean), retail giant Lotte Group said merging the entities, which are engaged in movie theater operation and film investment/distribution businesses, is “a strategic decision to promote sustainable growth and strengthen customer-centered services in the rapidly changing content industry environment.”
The news comes as Korea’s box office has hiccuped over the post-pandemic years with audiences not returning en masse. Despite some solid hits, the market’s previous high per-capita moviegoing rate has shrunk and recovery has been stymied.
The merged outfit unveiled today would be a jointly-managed entity that would “create synergy by integrating the operational know-how and marketing capabilities” of both, “while improving profitability by reducing duplicate investments and costs.” In addition, Lotte said, “they will improve financial soundness through active new investment attraction along with the merger” and “expand special theaters differentiated from OTT and improve the quality of customer service with the secured funds.”
Attracting new investment and the Fair Trade Commission’s review of the potential combination is being sought “as quickly as possible,” the statement noted.
Per details noted by Yonhap, Korea’s exhibition leader CGV operated 1,346 screens in 2024, Lotte had 915 screens and Megabox had 767. The combination of the latter two would result in a bigger footprint.
A Lotte official said, “This MOU is intended to combine the strengths of both companies to enhance business competitiveness and financial strength and provide differentiated customer experiences,” adding, “We will strive to have a positive impact on the entire film industry ecosystem through the merger, such as expanding content diversity and improving audience services.”