Proposed Merger Of Korean Cinema Chains Lotte & Megabox Collapses

South Korea’s second and third largest cinema chains, Lotte Cinema and Megabox, have called off their proposed merger.

Lotte Shopping revealed in a corporate filing on Wednesday that the memorandum of understanding signed with Megabox parent company Contentree JoongAng to merge the two chains was terminated on June 30. 

First signed in May last year, the agreement was extended three times – in September, December and April – before finally being allowed to expire. The merger of the country’s second and third biggest chains behind market leader CJ CGV was expected to reshape a market that has suffered slow recovery since box office revenues collapsed during the pandemic. 

While no reason was provided for cancelling the agreement, JoongAng Group is currently undergoing financial difficulties, with five subsidiaries, including Megabox and film sales and distribution division Plus M Entertainment, filing for court-supervised restructuring in mid-June. 

According to Lotte Shopping’s May 11 corporate filing, its entertainment subsidiary, Lotte Cultureworks, reported a profit for the first quarter of the current financial year. Following the cancellation of the merger, Lotte Cultureworks is reportedly planning to invest in upgrading its cinema chain, with advanced technology and recliner seating, as well as expand its immersive theatre productions business. 

Korea’s box office decreased by 12.4% to KRW1.047 trillion ($673M at today’s exchange rate) in 2025, according to Korean Film Council (KOFIC) figures, while admissions were down nearly 14% to 106.09 million. Local films took an even bigger hit, with a decline of around 39% in both admissions and revenue. The local industry has seen some relief this year with hits including The King’s Warden and Colony, but recovery may have come too late for some of the nation’s struggling cinema chains.

Plus M is releasing Na Hong-jin’s Cannes competition title Hope on July 15, which the industry is watching closely to see if it can also become a box office success and offer the wider group some financial relief. The King’s Warden and Colony were both released by Showbox, part of the Orion conglomerate, which divested its controlling stake in Megabox in 2007.

JoongAng Group’s woes have also hit its broadcast division JTBC, which also filed for court-supervised rehabilitation and restructuring in mid-June, and has reportedly delayed payments to talent on some of its unscripted shows. 

JTBC took a further hit with South Korea’s group stage exit from the FIFA World Cup 2026. The broadcaster reportedly paid $122M (KRW190BN) for Korean rights to the tournament between 2026 and 2030, with public broadcaster KBS agreeing to pay $9M (KRW14BN) for sublicensing rights, but is expected to recoup less from advertising following the Korean team’s exit.