A proposed merger between Lotte Cinema and Megabox, South Korea’s second and third largest cinema chains, has collapsed after more than a year of
A proposed merger between Lotte Cinema and Megabox, South Korea’s second and third largest cinema chains, has collapsed after more than a year of negotiations.
A corporate filing released by Lotte Shopping on Wednesday (July 1) revealed that a memorandum of understanding (MOU) signed with Megabox parent company Contentree JoongAng on May 8 last year was terminated on June 30.
The agreement had been extended three times — in September, December and April — before it was finally scrapped this week.
It follows recent troubles for media giant and Megabox-owner JoongAng Group, which filed for a court-supervised restructuring in mid-June with five subsidiaries affected, including Megabox plus film sales and distribution division Plus M Entertainment.
The financial crisis that has hit Megabox’s parent company also extends to the JoongAng Group’s broadcast division, JTBC, and the broadcaster is now facing further losses following South Korea’s group stage exit from the FIFA World Cup 2026 on June 28.
Reports suggest that an agreement could not be reached over how to finance what would have become South Korea’s largest theatrical exhibitor, overtaking longtime market leader CJ CGV with a combined national screen share of nearly 50%. Both sides were seeking up to $257.2m (KRW400bn) in outside investment to support the merger.
Despite this, Lotte Shopping’s entertainment subsidiary, Lotte Cultureworks, was the only one of Korea’s three major multiplex operators to report a profit in the first quarter of this year. According to a corporate filing released on May 11, the company earned consolidated revenue of $80.1m (KRW124.6bn) and operating profit of $5.1m (KRW7.9bn).
With the merger no longer viable, Lotte Cultureworks will reportedly invest in upgrading Lotte Cinema’s theatres with advanced projection technology, sound-specialised auditoriums and more recliner seating, as well as content expansion in the form of musicals and immersive theatre productions designed to grow its IP content.
When the MOU was first signed, a JoongAng Group statement said: “The main goal of this merger is to establish a sustainable business environment by building a differentiated screening environment, investing in the stable Korean film market, and securing competitive content. The ultimate goal is to revitalise the stagnant Korean film industry and provide quality service to customers.”
With these plans no longer moving forward, CGV, Lotte Cinema and Megabox will instead continue to compete in the local theatrical market as before.
The news comes at a challenging time for the Korean box office, which has struggled to recover since box office revenues collapsed during the Covid-19 pandemic.
Since a record-breaking box office performance in 2019, takings have dropped every year since. Local admissions fell 39% year-on-year to 43.58 million in 2025 – the lowest figures since 2005 (excluding the pandemic years).
Despite this, the market has shown some improvement this year thanks to local hits including Yeon Sang-ho’s Colony, folk horror Salmokji: Whispering Water and period drama The King’s Warden, which ranks as the highest-grossing domestic feature of all time with $108.2m earnings from 16.8 million admissions.
Local box office earnings for the first half of 2026 reached $347m (KRW539.7bn) from 53.19 million admissions, up from $262.3m (KRW407.9bn) and 42.5 million admissions in the same period last year.
High profile upcoming titles include Na Hong-jin’s Hope, which is scheduled to open July 15 after its premiere in Competition at Cannes in May.
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