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CJ CGV acquires Vietnam's leading cinema chain

2011/07/11 | 1669 views |  | Permalink | Source

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Top Korean exhibitor CJ CGV announced it has acquired Vietnam's leading Megastar Media Company for $73.6m on July 8. Megastar has a 60% market share in the Vietnamese exhibition sector and took in $23m worth of revenues last year. The company has assets of $38m.

Megastar opened its first cinema in Hanoi in 2006 as a joint venture between the American company Envoy Media Partners Limited and local capital. Megastar now has seven multiplexes and 54 screens in major cities around Vietnam including Ho Chi Minh and Hanoi.

"With a population of 90 million and a steady growth rate at the box office that recorded more than a 20% increase last year, the film industry is going into a long-term growth period. But, as for exhibition, there are only about 50 cinemas with around 150 screens, and even those have facilities or services that fall behind", said CJ CGV in a statement on why it decided to buy up Megastar.

The company also referred to anticipation that the Vietnamese government is pushing forward with mid- to long-term plans to develop the local film industry and expand the country's audience base; the 1st Vietnam International Film Festival held in Hanoi last year and the national Co Loa Studio, due to be completed in 2015.

Earlier on, Korea's second largest exhibitor Lotte Cinema entered the Vietnamese exhibition sector in 2008 when it bought up Diamond Cinema Joint Venture Company (DMC). Lotte opened its Vietnamese first cinema with three screens in Ho Chi Minh City and three more screens in Danang in May. Lotte opened a third multiplex with six more screens in Ho Chi Minh in December of the same year.

CJ CGV's recent acquisition is part of the exhibitor's global strategy which it has been putting into practice since 2006. From that time, the company also bought up 7 screens in China and one in the US, in LA's Koreatown.

In Vietnam, CJ CGV affiliate CJ Media already had interests in the broadcast sector. The conglomerate saw that Korean Wave culture became popular in Vietnam comparatively earlier on and more quickly. So CJ CGV will use its multiplexes as a bridge for introducing Korean culture in Southeast Asia.

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