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Hybe headquarters (Hybe) |
Hybe, the K-pop company behind boy group BTS, said Wednesday it has acquired a 14.8 percent stake in its industry rival SM Entertainment to become its largest shareholder.
Hybe said in a regulatory filing that it has paid for the purchase earlier than scheduled.
On Feb. 10, the company agreed to buy the shares from SM‘s founder and former chief producer Lee Soo-man for 422.8 billion won (US$335.8 million) and said the deal will be sealed on March 6. Lee had an 18.46 percent stake in SM at that time.
Lee’s remaining stake in SM will also go to Hybe within this year as the deal included a put option that gives Lee the right to sell the remaining shares at a specific price within a month from either the time when the business combination is approved or the day when the deal is sealed.
Industry experts say the early settlement of the deal was aimed to stably end the acquisition process by becoming its largest shareholder as early as possible ahead of a meeting of SM shareholders next month.
Hybe CEO Park Ji-won stressed in a message sent to SM‘s artists and their fans, employees and shareholders that his company respect what the rival agency’s “SM 3.0” growth strategies aim to achieve.
SM has recently announced the strategies centered on establishing a multi-production and label system, and using the intellectual property rights of its artists also for products other than music, such as merchandise and games.
“We‘ll actively support SM artists seeking chances to advance into overseas markets using the know-how and global network that we have built so far,” Park said.
Hybe will share its know-how of leading overseas K-pop markets in the United States, South America and India, among others, he added.
Hybe is home to global K-pop acts, such as BTS, Seventeen, Tomorrow X Together, Enhypen, NewJeans and Le Sserafim, while SM Entertainment is one of the country’s top K-pop agencies, with big-name K-pop acts like EXO, Red Velvet, NCT and aespa under its belt.
“Hybe SM Entertainment will work together to create the best company that can stand shoulder to shoulder with the world‘s top three major music companies,” he said.
Meanwhile, SM Entertainment said it will hold a meeting of shareholders on March 31 to elect new board members.
SM Entertainment also proposed to pay a dividend of 1,200 won per share, as it posted record profits last year. (Yonhap)
