There is a lot of consolidation going on among the giants of the K-Pop industry.
Earlier this week, we learned that Korea-based Kakao Corp buy 9.05% stake in K-Pop company SM Entertainment, the company behind stars like NCT, EXO, and Aespa.
Based on ReutersKakao is buying his stake in SM Entertainment in a deal worth 217.2 billion won (172.8 million USD).
Now, another giant of the K-Pop world, HYBE, the company behind superstars BTS, is also holding a stake in SM Entertainment.
HYBE is buying one 14.8% stake in the company from SM Entertainment founder Lee Soo Man, in a deal valued at 422.8 billion Korean won ($334.5 million).
Lee Soo Man was the company’s largest shareholder prior to the deal, with an 18.46% stake.
Today’s news comes the same week that HYBE America, led by Scooter Braun, has agreed gain Atlanta rap company QC Media Holdings or Quality controlhome to artists like Lil Baby, Migos, Lil Yachty and City Girls.
The company did not disclose the size of the acquisition, but Diversity report that the deal is valued 320 million USD in stock and cash, meaning that globally, HYBE spent more than $600 million in just one week.
Kakao’s acquisition of a 9.05% stake in SM Entertainment earlier this week made Kakao the second largest shareholder of SM, meaning that HYBE, with a 14.8% stake in the company, is now the majority shareholder. SM Entertainment’s best. HYBE is also reportedly planning to buy more shares from minority investors to increase its stake in SM Entertainment.
The change in the company’s share ownership rate takes place in the context of stress report between SM Entertainment’s manager and founder Lee Soo Man, who planned file a lawsuit against the company earlier this week following the Kakao deal.
Reuters report that HYBE’s investment in the company through the acquisition of shares from Lee Soo Man was criticized by SM Entertainment leadership.
SM said in a statement that they are “opposed.”[s] all active external mergers and acquisitions including HYBE”.
HYBE President Bang Si-Hyuk said in a statement that his company “fully agrees.”[s] with [SM Entertainment founder] Lee’s strategic initiatives include the metaverse, a multi-brand system, and a sustainability vision campaign.”
Lee Soo Man, founder and Executive Producer of K-Pop giant SM Entertainment, gave a speech at Stanford University last May. outline his vision for K-Pop.
His vision include the SM Cultural Universe (SMCU)One universe led by character similar to the cinematic multiverse like those created by the comic book giants Marvel or DC, is central to SM’s content strategy.
This week, SM Entertainment announced a new growth strategy, dubbed SM 3.0, which includes the establishment of five new production centers and several domestic and foreign music labels. The plan aims to systematize the production process for artists.
The move was revealed by the co-CEOs, Lee Sung Soo and Tak Young Jun, in a video uploaded on Facebook. YouTube on Friday (February 3).
The SM 3.0 strategy is seen as an attempt to reduce the company’s creative reliance on Lee Soo-man.
In October 2022, SM also severed ties with a private Lee-owned company called Like Planning over concerns about the company paying billions of Korean won annually to the company.
SM posted a 65.4% year-on-year increase in revenue for the third quarter of 2023, to 238.1 billion Korean won ($189.9 million), driven by sales of its ‘MD business unit. /Licensing’ increased by 76.1%.Global Music Business
