South Korea's second and third-largest cinema chains, Lotte Cinema and Megabox, have abandoned their proposed merger after multiple extensions. The deal, originally signed in May 2025, was extended three times over the following months before being formally terminated on June 30, 2026. The combination had been intended to create a stronger competitor to market leader CJ CGV within a sector struggling to rebound from pandemic-driven box office collapse.

The merger's collapse stems from severe financial difficulties at Megabox's parent company JoongAng Group, which has placed five of its subsidiaries including Megabox into court-supervised restructuring proceedings. South Korea's box office performance deteriorated significantly in 2025, with overall revenue dropping 12.4 percent to $785 million and attendance falling 14 percent, whilst domestic films experienced even steeper declines of approximately 39 percent in both metrics. In response, Lotte Cultureworks announced independent investment plans to modernise its cinema facilities and expand immersive theatre offerings, whilst the broader industry awaited signs of stabilisation from recent hit films.