Hybe Co. is set to sell its entire stake in SM Entertainment Co. to China’s Tencent Music Entertainment Group (TME).
According to Tuesday’s regulatory filings, Hybe will offload its 9.66 percent stake in SM to TME for 243.3 billion won ($177.3 million) and the transaction will be done via an after-hours block trade on Friday. TME operates Tencent Music, China’s largest music streaming platform.
Hybe acquired approximately 14.8 percent of SM in 2023 from the company’s founder and former chief producer Lee Soo-man. The move was part of Lee’s effort to counter Align Partners Capital Management Inc., an activist fund that had criticized his longstanding and lucrative production contract with SM through his privately held company Like Planning.
During the ensuing battle for control, Kakao Corp. entered the fray, forming a strategic alliance with SM and expanding its stake via a tender offer. As Kakao secured management control, Hybe sold part of its stake to Kakao and is now selling the remainder to TME.
Market observers are closely observing whether TME’s stake in SM will bolster the company’s push into the Chinese market. TME has previously partnered with several K-pop entities, including Hybe, JYP Entertainment Corp., K-pop analytics firm Circle Chart, and fan communication platform DearU. SM Entertainment also stated that it plans to strengthen its collaboration with TME.
By Kim Dae-eun, Jung Ju-woen, and Chang Iou-chung
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
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