The content originally appeared on: CNN
HYBE, the management agency behind superstar boy band BTS, will become the biggest shareholder of its K-pop rival, SM Entertainment.
The move strengthens HYBE’s dominance in South Korea’s music industry, where it is already the biggest player, even as it seeks to expand abroad.
The South Korean entertainment giants announced the deal Friday, with HYBE set to pick up a 14.8% stake in SM Entertainment for 422.8 billion Korean won ($334.5 million).
SM was founded by legendary music producer Lee Soo-man, who is widely referred to in South Korea as “the godfather of K-pop.” The company is known for representing hit artists, such as NCT 127, EXO, BoA and Girls’ Generation.
News that the two companies were joining forces fired up investors. SM Entertainment’s shares soared 15% in Seoul on Friday, while HYBE’s stock rose 3%.
Outside of BTS, HYBE also represents prominent bands such as NewJeans, Tomorrow x Together and Seventeen.
But its marquee act is currently on hiatus. Members of BTS started individual compulsory military service in South Korea late last year, with the group as a whole expected to reconvene around 2025.
Now, HYBE is turning its attention elsewhere.
“This acquisition represents a major step by HYBE to integrate the global expertise of both companies to become a game changer in the global music industry,” the companysaid in a statement.
HYBE has been taking steps to expand its global reach. On Thursday, it announced another major deal in the United States, saying it would acquire the owner of Quality Control, a hip-hop label that represents popular artists including Migos and Lil Yachty.
That deal will help HYBE build a stronger presence in the US music market, according to Sunhwa Lee, an internet and entertainment analyst at KB Securities. In a report Thursday, she noted that the company’s broader ambitions were “to go beyond the boundaries of K-pop and develop new global artists across various genres.”
“This partnership is a vital part of our growth plan to innovate the entertainment industry through a diversified portfolio,” HYBE Chairman Bang Si-Hyuk said in a statement. “We will work together to continue adding depth of hip-hop to the global music industry.”