HYBE Corp. is selling its entire stake in rival SM Entertainment to China’s Tencent Music Entertainment Group for 243 billion won ($177 million), marking the end of a costly two-year foray that began with an unsuccessful takeover bid.
The K-pop powerhouse behind BTS will transfer 2.21 million shares, representing a 9.38% stake, at 110,000 won per share on May 30 through an after-hours block trade. The transaction effectively allows HYBE to break even on an investment that once exceeded 550 billion won.
HYBE’s involvement with SM Entertainment, home to groups like aespa and NCT, started in 2023 when it acquired a 14.8% stake from founder Lee Soo-man for 422.8 billion won. The company later increased its holding while pursuing a takeover, only to be outmaneuvered by Kakao Corp., which now controls over 40% of SM.
The sale to Tencent Music, priced at a 15% discount to recent trading levels, reflects HYBE’s strategy to divest non-core assets and focus resources on its primary business. For Tencent, the acquisition makes it SM’s second-largest shareholder and deepens Chinese tech companies’ involvement in South Korea’s entertainment industry.
The timing coincides with expectations that Beijing may lift restrictions on Korean cultural imports, potentially boosting SM’s prospects in the Chinese market.
