Tencent is poised to become the second-largest shareholder in SM Entertainment, a major K-Pop agency, after Hybe announced plans to sell its 9.7% stake (2.2 million shares) to Tencent Music Entertainment for 243 billion won ($177 million) on May 30. This would place Tencent behind Kakao Corp and its affiliate, which hold a combined 42% controlling stake. The move coincides with potential signs of a thaw in China's unofficial ban on K-Pop concerts, which, if lifted, could significantly boost ticket revenue for major agencies.
Tencent Music Entertainment (1698.HK) is poised to become the second-largest shareholder in South Korean K-Pop agency SM Entertainment (041510.KQ), following an agreement for Hybe (352820.KS) to sell its 2.2 million shares, representing a 9.7% stake, for 243 billion won (approximately $177 million) on May 30. This transaction will position Tencent Music directly behind Kakao Corp (035720.KS) and its affiliate Kakao Entertainment, which collectively maintain a 42% controlling stake in SM Entertainment. Hybe, which acquired the SM Entertainment stake during a failed takeover attempt in 2023, stated the sale is for the "efficient management of investment assets." This development occurs amid emerging signs of a potential relaxation in China's unofficial restrictions on K-Pop concerts and performances, which have been in effect since 2016. Analysts project that a reopening of the Chinese market to K-Pop could lead to a sharp increase in ticket revenue for major agencies, significantly impacting their financial performance.
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