HYBE, the BTS agency, is attempting to acquire K-pop competitor SM Entertainment

South Korean entertainment business HYBE said on February 10 that it will purchase $335 million worth of shares in competitor SM Entertainment in order to bolster its dominance in the K-pop sector.

The transaction would make HYBE the top shareholder of SM Entertainment, as it acquires a 14.8% interest in its rival from the previous largest shareholder and SM founder, Lee Soo-man, for an 18.4% stake, the company stated in a statement.

“HYBE firmly endorses former Chief Producer Lee’s strategic ideas, which include the metaverse, a multi-label system, and the sustainable vision campaign,” stated HYBE Chairman Bang Si-Hyuk.

The agency HYBE oversees the K-pop supergroup BTS. NCT and Aespa are two further prominent K-pop bands who call SM their home.

Friday, HYBE also made an offer for SM shares owned by minority owners, attempting to acquire up to 25 percent of the rival agency in order to acquire managerial powers.

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SM, JYP, and YG Entertainment controlled the South Korean pop music business for many years, until the international success of the K-pop boy band BTS made HYBE the largest of the four organizations.

But over the next couple of years, all seven BTS members are slated to complete their military duty, beginning with Jin, the group’s eldest member, who enlisted in December. The septet will not return in its entirety until 2025.

Kim Do Heon, a music critic, believes that SM Entertainment’s large portfolio may be economically advantageous for HYBE now that the group is on sabbatical.

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“HYBE grew into a giant, but its flaw was that it lacked a legacy. Kim stated that SM, a firm that has existed throughout K-history, pop’s will add legacy to HYBE.”

As of 11:05 a.m., HYBE and SM Entertainment shares were up 6% and 16%, respectively (0205 GMT).

This Monday, the South Korean digital company Kakao Corp announced that it will purchase a 9.05 percent share in SM Entertainment in order to develop cooperative ventures, such as worldwide K-pop auditions.