Is the FTC Examining the Merger of South Korea's Second and Third Largest Cinema Chains?
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Synopsis
The FTC's review of the merger between South Korea's second and third largest cinema operators could shake up the local film industry. As JoongAng Group and Lotte Group look to join forces, the implications for consumers and competition are under scrutiny.
Key Takeaways
- The FTC is reviewing the merger of South Korea's cinema giants.
- The merger could reshape the local cinema landscape.
- CGV remains the current market leader.
- The combined entity would surpass CGV in screen count if the merger is approved.
- Consumer impact will be a key focus of the FTC's review.
Seoul, July 10 (NationPress) - The antitrust authority of South Korea announced on Thursday that it is assessing the proposed merger of the nation's second and third largest cinema operators. Media conglomerate JoongAng Group and retail giant Lotte Group submitted a preliminary inquiry to the Fair Trade Commission (FTC) last month following the signing of a memorandum of understanding (MOU) in May regarding the merger of their cinema chains, Megabox and Lotte Cinema, as reported by Yonhap news agency.
The FTC's preliminary consultation system, introduced last year to facilitate company mergers, is now in action. If the merger is finalized, it could significantly alter the landscape of the domestic cinema sector, potentially leading to a competitive two-way race between CGV, the current market leader, and the newly formed entity.
As per the Korean Film Council, CGV operated 1,346 screens across the nation in 2024, the highest among cinema chains in South Korea. In comparison, Lotte Cinema had 915 screens, with Megabox trailing at 767 screens.
Should the merger succeed, the new company would surpass CGV in terms of screens operated.
Industry analysts are also monitoring the possible integration of Lotte Entertainment and PlusM Entertainment. Together with CJ ENM, Showbox, and NEW, these entities are pivotal players in South Korea's film distribution market.
"This marks the first preliminary consultation for a merger between conglomerates," stated the FTC. "We will thoroughly evaluate the merger's effects on consumers and its implications for fair competition."
In May, JoongAng Group and Lotte Group formalized their agreement to merge their respective subsidiaries managing Megabox and Lotte Cinema, the country's third- and second-largest cinema chains.
The joint venture will be co-managed by both firms, with plans to expedite new investments and the FTC's review of the merger.
JoongAng Group's entertainment division, Contentree JoongAng, holds a 95.98% share in Megabox JoongAng, while Lotte Group's Lotte Shopping owns an 86.37% stake in Lotte Cultureworks.
Point of View
The merger of JoongAng Group and Lotte Group's cinema operations is a pivotal development in South Korea's entertainment landscape. While it holds the potential for enhanced competition, we must also consider the effects on consumers and market dynamics as the FTC conducts its review.
NationPress
15/08/2025
Frequently Asked Questions
What is the FTC reviewing?
The FTC is reviewing the proposed merger between South Korea's second and third largest cinema chains, Lotte Cinema and Megabox.
Why is the merger significant?
If approved, the merger could significantly alter the cinema industry by creating a competitive landscape between CGV and the new entity formed from the merger.
What are the stakes for consumers?
The FTC will analyze how the merger could impact consumer choice and fair competition in the cinema market.
Who owns the cinema chains involved?
JoongAng Group and Lotte Group own Megabox and Lotte Cinema respectively, with substantial stakes held by their entertainment arms.
When was the preliminary consultation requested?
The preliminary consultation request was submitted to the FTC last month, following an MOU signed in May.
