FTC reviewing merger of South Korea's 2nd, 3rd largest cinema operators

Seoul, July 10 (IANS) South Korea's antitrust regulator said on Thursday it is reviewing the planned merger between the country's second and third largest theatre chains.

Media giant JoongAng Group and retail conglomerate Lotte Group submitted a preliminary consultation request to the Fair Trade Commission (FTC) last month after they signed a memorandum of understanding (MOU) in May to merge their respective cinema chains -- Megabox and Lotte Cinema, reports Yonhap news agency.

The FTC's preliminary consultation system was introduced last year to expedite mergers between companies.

If completed, the merger is expected to reshape the domestic cinema industry by creating a two-horse race between CGV -- the current market leader -- and the new entity.

According to the Korean Film Council, CGV operated 1,346 screens nationwide in 2024, the most among the country's cinema chains. Lotte Cinema had 915 screens, followed by Megabox with 767.

If the merger goes through, the number of screens operated by the new entity will surpass that of CGV.

Industry watchers are also closely eyeing the potential integration of Lotte Entertainment and PlusM Entertainment. Alongside CJ ENM, Showbox and NEW, both are key players in South Korea's film distribution sector.

"This is the first preliminary consultation case on a merger between conglomerates," the FTC said. "We will closely examine the impact of the merger on consumers and whether it may interfere with fair competition."

In May, JoongAng Group and Lotte Group signed an agreement to merge their respective affiliates that operate Megabox and Lotte Cinema -- the country's third- and second-largest movie theatre chains.

It added the joint venture will be co-managed by both companies and they intend to proceed with attracting new investment and the Fair Trade Commission's review of the business combination as quickly as possible.

JoongAng Group's entertainment arm, Contentree JoongAng, holds a 95.98 per cent stake in Megabox JoongAng, while Lotte Group's Lotte Shopping owns an 86.37 per cent stake in Lotte Cultureworks.

—IANS

na/