HYBE decides to sell 243 billion KRW stake in SM Entertainment to THIS Chinese company
And who's buying? None other than Tencent Music, a major Chinese entertainment player, is marking a big shift in who holds power in K-pop's business side.
On May 27, according to a filing with the Financial Supervisory Service, HYBE's deal is valued at around 243 billion KRW (roughly USD 178 million), involving 2.2 million shares, which represents 9.66 per cent of SM's total stock. The shares will be sold at 110,000 KRW each, which is about 15 per cent lower than SM's current market price.
After the transaction is completed on May 30 through a block deal after market close, Tencent will become SM's second-largest shareholder, right after Kakao.
HYBE Owned Part of SM?
Yes. In early 2023, HYBE jumped into the battle to gain control of SM Entertainment. HYBE had acquired a 14.8 per cent stake from SM's founder, Lee Soo Man, during a fierce fight with Kakao over SM's future.
But after some back-and-forth, Kakao won the battle for control. HYBE backed off and began offloading its shares, first selling part to Kakao and now selling the rest to Tencent.
Why Is HYBE Selling Shares Now?
HYBE reveals this is part of 'reorganizing non-core assets,' meaning SM is no longer part of its long-term strategy. Instead, HYBE wants to focus on future growth, possibly new talent, technology, or global expansion, especially with BTS members currently on military hiatus.
The timing of the sale also makes sense. SM Entertainment's stock has been going up, rising by about 20 per cent in the past month. Why? People are getting hopeful that China might start allowing more Korean entertainment again, like K-pop concerts and dramas.
So for HYBE, this was a good moment to sell, while the stock price was still high and before things could change again.
What Does This Mean for K-pop?
This move shakes up the power balance in K-pop. For HYBE, it's a clean break from SM — a former rival in the same market. Now, HYBE can fully focus on its artists, platforms like Weverse, and global plans, especially with the return of BTS on the horizon starting in 2025.
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