The merger process between Lotte Cinema and Megabox has been halted. Lotte Cultureworks and Contentree JoongAng had pursued the deal through negotiations, but the launch of rehabilitation proceedings is analyzed to have affected the merger's collapse.
According to the Financial Supervisory Service's electronic disclosure system Tuesday, the memorandum of understanding (MOU) signed by Lotte Cultureworks and Contentree JoongAng to pursue the merger expired as of the previous day, June 30. As a result, all procedures related to the merger have been halted.
The market views that the launch of rehabilitation proceedings for Contentree JoongAng, amid financial difficulties at JoongAng Group, likely affected the termination of the merger.
With the collapse of the merger with Megabox, initially expected to become a "big deal" in the film industry, Lotte Cinema is expected to focus on building its own capabilities and securing growth drivers.
Lotte Cultureworks returned to profitability in the first quarter of this year, aided by the recent recovery in the film market. Lotte Cultureworks posted first-quarter revenue of 124.6 billion won, up 44.4% from the same period last year, and operating profit of 7.9 billion won. It recorded a loss in the first quarter of last year.
Lotte Cultureworks plans to improve its screening environment through recliner seats, the latest projectors, and specialized sound theaters, while focusing on strengthening its content capabilities by securing its own intellectual property (IP). It is also pursuing overseas expansion of its immersive and experiential performance brand and joint production of musicals.
