South Korea’s proposed merger between Lotte Cinema and Megabox is officially no longer moving forward, closing one of the country’s most closely watched cinema exhibition talks.
The original memorandum of understanding, or MOU, was announced by Lotte Group in May 2025 as a framework for combining Lotte Cultureworks, the operator of Lotte Cinema, with Megabox JoongAng. An MOU is not a final merger contract, but a formal agreement that sets out the companies’ intention to work toward a deal. The end of the process was later disclosed by Lotte Shopping, Lotte Cultureworks’ majority shareholder, after the MOU expired on June 30, 2026.
The talks began in May 2025, when Lotte Group and JoongAng Group announced plans to combine their cinema businesses. At the time, the move was seen as a major strategic attempt to strengthen both companies in a theatrical market still struggling with weaker admissions, shifting audience habits and the long recovery from the pandemic.
A completed deal would have brought together South Korea’s second and third largest cinema chains behind market leader CJ CGV. That would have created a much larger exhibition group, with greater screen scale and more room to invest in upgraded cinemas, premium formats and new audience services.
What the End of the Deal Means for Korean Cinemas
CJ CGV remains the leading cinema chain, while Lotte Cinema and Megabox will continue to operate separately. For the wider industry, the end of the talks removes what could have been one of the most significant changes to South Korea’s exhibition sector in years.
The decision also comes at a difficult time for Korean cinemas. According to Korean Film Council figures, South Korea’s total box-office revenue fell in 2025, while admissions also declined. Local films were hit even harder, showing that the challenge is not only about cinema attendance, but also about rebuilding confidence around domestic theatrical releases.
For Lotte Cinema and Megabox, the end of the merger means each company will now have to address those pressures on its own. Investment in better venues, stronger programming and new ways to bring audiences back to theaters will remain central to the sector’s recovery.
The merger talks may be over, but the reasons they began are still very much present. South Korea’s cinema market continues to face the same question: how to make theatrical exhibition stronger, more competitive and more attractive to audiences in a changed entertainment landscape.
