HYBE Has Sold All Of Its SM Entertainment Shares, This Is The Company Who Is Now Its 2nd Largest Shareholder

HYBE has sold all of its shares in SM Entertainment—worth approximately 243.3 billion won (around 180 million USD)—to Tencent Music Entertainment, a subsidiary of Chinese tech giant Tencent.

According to the Financial Supervisory Service’s electronic disclosure system on May 27, HYBE offloaded its entire 9.38% stake in SM Entertainment, totaling 2,212,237 shares, to Tencent Music. The deal is priced at 110,000 won per share and will be executed through a block trade after market close on May 30.

This move positions Tencent Music as SM’s second-largest shareholder after Kakao and Kakao Entertainment, which together hold a 41.5% stake.

HYBE initially acquired the shares in 2023 during its attempt to take over management control of SM. A representative from HYBE explained, “This is part of a strategic restructuring to focus on core business areas. The funds secured will be used to bolster future growth engines.”

Tencent Music has long collaborated with major K-pop agencies, including HYBE and Cube Entertainment, by distributing their music in China. Through various subsidiaries, Tencent also holds stakes in YG Entertainment (4.30%) and Kakao Entertainment (4.61%).

With this latest acquisition, Tencent Music is expected to deepen its partnerships in K-pop, leveraging SM’s extensive IP portfolio.

SM, on the other hand, is looking to expand its influence in the Chinese market. It has a long history of focusing on China, dating back to H.O.T.’s landmark 2000 concert in Beijing, which played a pivotal role in launching the “Hallyu” wave. Earlier this year, SM and Tencent Music celebrated SM’s 30th anniversary with a series of events in cities like Beijing and Shenzhen.

Additionally, SM’s subsidiary Dear U, which runs the fan communication platform Bubble, has partnered with Tencent Music to bring SM’s IP into the Chinese market more aggressively.

An SM representative commented, “We plan to strengthen our collaboration with Tencent Music going forward.”

Source: (A)