Joongang Group and Lotte Group signed a memorandum of understanding(MOU)on the 8th for the merger of their film affiliates, Megabox Joongang and Lotte Cultureworks.Through this big deal between leading film industry players, a multiplex and content production company leading the domestic market is expected to emerge.

The two companies have signed an MOU between shareholders after consultation to strengthen the competitiveness and ensure sustainability of the theater and film business.Currently, Contentree Joongang of Joongang Group owns 95.98% of Megabox Joongang, and Lotte Shopping of Lotte Group owns 86.37% of Lotte Cultureworks.The joint venture will be jointly managed by the two companies, and they plan to attract new investment and proceed with the Fair Trade Commission’s corporate combination review as quickly as possible.

Megabox Joongang’s main businesses are Megabox(movie theater), Plus M Entertainment(investment and distribution company), and Playtime Joongang(indoor kids ‘theme park), while Lotte Culture Works’ main businesses are Lotte Cinema(movie theater), Lotte Entertainment(investment and distribution company), and Charlotte Theater(theater).

Through this merger of the two companies, Joongang Group and Lotte Group plan to strengthen the competitiveness of their existing theater and film businesses and expand new businesses, thereby revitalizing the domestic film industry, which has been stagnant since COVID-19.They expect to maximize synergy through the merger, such as securing financial soundness by improving profits and attracting new investments, and strengthening their own competitiveness in advertising sales and theater operations by easing the competitive structure.In particular, they plan to further accelerate the development of special theaters that cannot be experienced on OTT by eliminating duplicate investments and securing efficient operations and new investment capacity.

As both companies have secured a leading position not only in movie theaters but also in Korean film production and investment distribution, they plan to create synergy in content investment.The goal is to strengthen investment in quality new content by utilizing the IP and accumulated production know-how acquired by each company, and to establish a virtuous cycle structure in which improved profits are reinvested in various ways to activate the market.

A Joongang Group official 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,” adding, “The ultimate goal is to revitalize the stagnant Korean film industry and provide quality service to customers.”

Hong Se-young, reporter for Donga.com projecthong@donga.com

This article is automatically translated using Google AI. If you notice any inaccuracies, please let us know at allkstar@donga.com.