K-Pop Deals: HYBE sells entire stake in SM Entertainment to Tencent Music
- finminati
- May 31
- 2 min read
Updated: Jun 28
31 May 2025, Saturday
HYBE Corporation sold 9.66% stake (worth $178 Mn approx.) in SM Entertainment to Tencent Music.
This major deal is expected to re-shape the K-Pop landscape and strengthen the influence of Tencent, a Chinese company, in K-Pop.
History between HYBE and SM Entertainment
HYBE and SM Entertainment are both among the biggest and most successful entertainment agencies in Korea, with some of the biggest K-Pop artists signed under them.
Some of the artists under HYBE include BTS, Seventeen and Le Serrafim, etc.; while some artists under SM include EXO, NCT and Aespa.
HYBE is a big K-Pop powerhouse that has multiple agencies under it including BigHit, Pledis, Source Music etc.
Back in early 2023, HYBE wanted to add SM to its ever-growing list of associated agencies.
Hence it acquired 14.8% stake in SM, from SM’s founder Lee Soo Man, in hopes to gain managerial rights in SM. This was followed by an intense corporate battle between HYBE and Kakao to buy more shares via public tender offers.
Finally, HYBE stepped back and began offloading its shares. A portion was sold to Kakao earlier, and the rest is now being handed to Tencent.
Why is HYBE exiting now?
HYBE wants to focus on its core business / assets like investing in new talent, expanding its global reach and of course, planning for the return of BTS, post completion of their military service.
Impact of the Deal on SM
This deal makes Tencent the 2nd largest shareholder with 9.66% stake in SM after Kakao. Currently, Kakao holds a 42% controlling stake in SM.
This deal could lead to an increase in K-Pop presence in China and perhaps (re-)open avenues for K-Pop performances in China.
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