What’s Happening? Lotte Shopping and Megabox Plan Merger
Lotte Shopping is pursuing a merger of its film business (Lotte Cultureworks) with Megabox. Both companies signed an MOU in May 2025 and extended the exclusive negotiation period in September. Specific merger terms haven’t been finalized, with a re-announcement expected on March 3, 2026.
Why Merge? Synergy and Enhanced Competitiveness
Lotte Shopping aims to increase its market share in the domestic film market through this merger, anticipating synergistic effects in ticket sales, concession stand operations, and advertising. The merger is also expected to create economies of scale, improving operational efficiency and reducing costs.
Is the Merger a Guaranteed Success? Uncertainties and Risk Factors
- Merger Uncertainty: The final success of the merger remains unclear. If negotiations fail, it could negatively impact stock prices.
- Structural Difficulties in the Film Industry: The film industry faces challenges due to the growth of OTT services and the expansion of the VOD market. Profitability improvements may be difficult even after the merger.
- Lotte Shopping’s Poor Performance: Lotte Shopping’s recent underperformance could burden the merger process.
What Should Investors Do? Cautious Approach and Continuous Monitoring
The current investment recommendation for Lotte Shopping is ‘Neutral.’ While positive effects can be expected if the merger is successful, uncertainties are also high. Investors should closely monitor the progress of merger negotiations, Lotte Cultureworks’ performance, Lotte Shopping’s own business performance improvement trend, as well as interest rate and exchange rate volatility.