CJ backs out on Plenus takeover deal

Exec sez there's no possibility of talks continuing

SEOUL– South Korea’s CJ Entertainment pulled the plug on its plan to purchase a 28.7% stake in Plenus, the mother company of producer-distrib Cinema Service, Friday, citing irreconcilable differences in negotiating the price and conditions.

“We have ended all procedures and there is no possibility of restarting partnership talks in the future,” said Han Sang-hun, CJ official in charge of the project.

CJ Entertainment in January signed an MOU for purchasing an equity stake in Plenus. The tie would have given CJ and Cinema Service about 60% of the Korean film distribution market.

The possible deal had stirred some controversy in the film sector, which feared monopoly of the distribution majors. Groups such as “Citizens’ Coalition for Democratic Media” released a statement last month, saying, “The partnership is a monopoly that will ruin the balance in the film distribution sector. If paired, the CJ-Plenus may very well violate existing fair trade regulations.”

Last year, Cinema Service and CJ Entertainment recorded market shares of 22.44% and 17.62% percent, respectively. When considering Korean films alone, the combined share reached 61.07%.

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