Korea’s cinema landscape is poised for a major shakeup as Lotte Cultureworks and Megabox JoongAng signed a memorandum of understanding to merge their multiplex operations, the companies announced Wednesday.
The proposed joint venture would combine two of South Korea’s three major cinema chains, creating the country’s largest theater operator with 1,682 screens nationwide. This would surpass current market leader CGV, which operates 1,346 screens.
JoongAng Group’s Contentree JoongAng, which holds nearly 96% of Megabox JoongAng shares, and Lotte Shopping, which owns over 86% of Lotte Cultureworks, will co-manage the new entity. The merger requires approval from Korea’s Fair Trade Commission.
The agreement comes as Korea’s theater industry faces significant challenges. Both companies have struggled with financial difficulties since the pandemic, with Lotte Cultureworks implementing voluntary retirement programs in 2020, 2021, and 2023.
Beyond theater operations, the merger would combine complementary businesses. Lotte brings its Lotte Entertainment production and distribution division plus the Charlotte Theater, while Megabox contributes Plus M Entertainment and Playtime JoongAng, an indoor kids theme park.
The timing reflects mounting pressure on traditional cinema chains from streaming platforms. Market leader CGV recently underwent its own restructuring, with approximately 80 employees accepting voluntary retirement packages in March.
