Lotte Group and JoongAng Group announced on the 8th that they have signed a memorandum of understanding (MOU) for the merger of Lotte Cultureworks, which operates movie theaters and engages in film investment and distribution, with MegaBox JoongAng.
The MOU between the two companies aims to strengthen competitiveness and ensure sustainability in the theater and film business. The joint venture is planned to be jointly managed by both companies, which will seek new investments and expedite the Fair Trade Commission's review of the merger.
Lotte Cultureworks is 86.37% owned by Lotte Shopping. The largest shareholder of MegaBox JoongAng is Contentree JoongAng, which holds a 95.98% equity stake.
Lotte Cultureworks engages in businesses such as ▲Lotte Cinema (movie theaters) ▲Lotte Entertainment (investment and distribution company) ▲Charlotte Theater (theater). MegaBox JoongAng's major businesses include ▲MegaBox (movie theaters) ▲Plus M Entertainment (investment and distribution company) ▲Playtime JoongAng (indoor kids theme park).
The companies aim to enhance the competitiveness of their existing theater and film businesses and expand into new ventures through the merger. They plan to integrate operational know-how and marketing capabilities to create synergies while reducing duplicate investments and expenses to improve profitability.
In addition, the companies plan to enhance their financial soundness through active new investment attraction alongside the merger. The secured funds will expand online video services (OTT) and differentiated special theaters to improve customer service quality.
The companies plan to generate synergies in the area of content investment as well. They aim to strengthen quality new content investment by leveraging the intellectual property (IP) and accumulated production know-how secured by each company, and establish a virtuous cycle of reinvesting improved revenue to stimulate market activity.
Lotte Shopping stated through a disclosure on that day, “We have signed an MOU to promote the merger among Contentree JoongAng, Lotte Cultureworks, and MegaBox JoongAng, but no specifics related to the merger have been concretely established to date.” It added, “We will re-disclose the specific details related to this at the time they are determined or within a month.”