JoongAng Group and retail behemoth Lotte Group have inked a blockbuster deal that promises to dramatically reshape South Korea‘s theatrical landscape.
The media and retail giants signed a memorandum of understanding Thursday to merge their respective cinema chains — Megabox and Lotte Cinema — creating what would become the nation’s largest theatrical exhibition entity.
The joint venture, which will be co-managed by both corporate heavyweights, aims to fast-track new investment opportunities and Fair Trade Commission approval, according to JoongAng Group’s announcement.
“The agreement was reached following discussions aimed at strengthening competitiveness and ensuring long-term sustainability in their cinema and film businesses,” revealed JoongAng Holdings, the group’s holding company, in an official statement, per news agency Yonhap.
Contentree JoongAng, the entertainment division of JoongAng Group, currently holds 95.98% stake in Megabox JoongAng. Meanwhile, Lotte Shopping maintains an 86.37% ownership position in Lotte Cultureworks.
The theatrical exhibition sector in South Korea continues to struggle with pandemic recovery challenges, and both groups have expressed optimism that their combined strength will help reinvigorate the domestic film industry.
Korean Film Council data shows that while market leader CGV currently operates 1,346 screens nationwide, the merged entity would instantly leapfrog to the top position with a combined 1,682 screens — Lotte Cinema’s 915 plus Megabox’s 767.
The deal extends beyond just theatrical exhibition. Lotte Cultureworks’ portfolio includes distribution and investment powerhouse Lotte Entertainment and the Charlotte musical theater chain, while Megabox JoongAng controls PlusM Entertainment (a film investor and distributor) and Playtime JoongAng, which operates indoor children’s playgrounds.
The merger might also impact the distribution landscape, as both Lotte Entertainment and Megabox’s PlusM Entertainment rank among South Korea’s key film distribution players, alongside CJ ENM, Showbox and New.
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