HYBE, managing agency behind the superstar boy band BTSwill become the largest shareholder of its K-pop rival, SM Entertainment.
The move solidifies HYBE’s dominance in South Korea’s music industry, where it is already a major player, even as it seeks to expand overseas.
On Friday, South Korean entertainment giants announced a deal in which HYBE will buy a 14.8% stake in SM Entertainment for 422.8 billion won ($334.5 million).
SM was founded by legendary music producer Lee Soo Man, who is known in South Korea as the “godfather of K-pop”. The company is known for representing popular artists such as NCT 127, EXO, BoA, and Girls’ Generation.
The news that the two companies are joining forces has rattled investors. SM Entertainment shares soared 16% in Seoul on Friday. HYBE shares initially rose 3% before falling 1.5%.
Apart from BTS, HYBE also represents famous groups such as NewJeans, Tomorrow x Together and Seventeen.
But his main action at present hello break. The members of BTS began their individual mandatory military service in South Korea at the end of last year, and the group as a whole is expected to reunite around 2025.
Now HYBE is turning its attention elsewhere.
“This acquisition represents an important step on the part of HYBE to integrate the global expertise of both companies to be a game changer in the global music industry,” the company said in a statement. says in the statement.
HYBE is taking steps to expand its global footprint. On Thursday it announced another big deal in the United States that says it will acquire the owner of Quality Control, a hip-hop label that represents popular artists including Migos and Lil Yachty.
The deal will help HYBE strengthen its presence in the US music market, according to Sunhwa Lee, Internet and entertainment analyst at KB Securities. In Thursday’s report, she noted that the company’s broader ambition is to “go beyond K-pop and develop new global artists across a variety of genres.”
“This partnership is a vital part of our growth plan to innovate the entertainment industry with a diversified portfolio,” said HYBE Chairman Bang Shi Hyuk. “We will work together to continue adding hip-hop depth to the global music industry.”
Bernie Cho, a Seoul-based music industry executive, said the two announced deals were unlike anything he’d seen before.
It’s “maybe the most powerful one-two punch I’ve ever seen or heard. [of] in the history of the K-pop industry,” said Cho, president of DFSB Kollective, a music artist and label service agency.
He said the deals could put HYBE in the same league as the “big three” big record labels: Sony.
(START)Universal and Warner Music.
“HYBE in their post-BTS stage really stunned and surprised fans and financial analysts with really smart, really smart big deals,” he added.
In 2019 BTS had to up to 90% of revenue in its management company, then known as Big Hit Entertainment. This left analysts concerned that the firm, later renamed HYBE, was relying too much on the group.
However, HYBE has since expanded its list.
In recent years, his roster has included other global celebrities, including Justin Bieber, Ariana Grande, and Demi Lovato. even imagined by the HYBE subsidiary in the USA.
South Korean firm also start a relationship With Big Machine Label Group, a subsidiary that curates some of country music’s top artists such as Sheryl Crow, Ruscal Flatts and Tim McGraw.
“HYBE is no longer a K-pop giant. “K” is silent now,” Cho said. “They’ve become a pop music giant.”