▲ These logos of Lotte Cultureworks and Megabox JoongAng are provided by each firm. (PHOTO NOT FOR SALE) (Yonhap)

 

SEOUL, May 8 (Yonhap) -- Lotte Cultureworks and Megabox JoongAng, the respective operators of South Korea’s major multiplex chains Lotte Cinema and Megabox, have signed a memorandum of understanding (MOU) to pursue a merger, the companies said Thursday.

 

The joint venture will be co-managed by Lotte Group and JoongAng Group, and both parties plan to move forward swiftly with securing new investments and undergoing a corporate consolidation review by the Fair Trade Commission. Specific merger terms will be finalized at a later date.

 

Currently, JoongAng Group’s ContentreeJoongAng holds a 95.98 percent stake in Megabox JoongAng, while Lotte Group’s Lotte Shopping owns 86.37 percent of Lotte Cultureworks.

 

JoongAng Holdings said the agreement was reached after discussions between the two firms, aiming to strengthen competitiveness and ensure long-term sustainability in the cinema and film production sectors.

 

Lotte Cultureworks operates Lotte Cinema (theater chain), Lotte Entertainment (film distribution and investment), and Charlotte Theater (performing arts venue). Megabox JoongAng runs Megabox (theater chain), Plus M Entertainment (film distribution and investment), and Playtime JoongAng (indoor kids' theme parks). The core business for both companies is theater operation and film distribution.

 

If the merger materializes, the newly formed entity is expected to form a strong rivalry with CJ CGV, currently South Korea's largest cinema chain.

 

According to the Korean Film Council, CGV operated 1,346 screens nationwide as of last year, while Lotte Cinema and Megabox ran 915 and 767 screens, respectively. Combined, the new entity would control 1,682 screens — surpassing CGV.

 

Industry watchers are also paying close attention to the merger of the two firms' distribution arms, Lotte Entertainment and Plus M Entertainment, both considered major players in the Korean film market alongside CJ ENM, Showbox, and NEW.

 

Lotte Entertainment has released several blockbuster hits, including Along with the Gods, The Pirates: The Last Royal Treasure, War of the Arrows, and Hansan: Rising Dragon. Plus M Entertainment, an emerging powerhouse, has produced successful films such as 12.12: The Day, the The Outlaws series (2 to 4), and Hunt.

 

Both companies plan to leverage their intellectual property (IP) assets and production capabilities to pursue aggressive investments in new content.

 

JoongAng and Lotte said the merger aims to revitalize the domestic film industry, which has struggled in the aftermath of the COVID-19 pandemic. The companies also plan to expand premium theater formats such as Dolby Cinema and Superplex to offer immersive experiences not available via streaming services.

 

"The key goal of this merger is to build a sustainable business model through differentiated viewing environments, stable investment in the Korean film market, and the securing of competitive content," a JoongAng Group official said.

 

[ⓒ K-VIBE. 무단전재-재배포 금지]