HYBE sells Rs 1,480 Cr stake in SM to Tencent, marking a major K-pop business shakeup

HYBE sells Rs 1,480 Cr stake in SM to Tencent, marking a major K-pop business shakeup

In a move that’s sending ripples across the K-pop industry, HYBE Corporation — the powerhouse behind global sensations like BTS and SEVENTEEN — has announced the sale of its entire 243 billion KRW (approximately USD 178 million) stake in SM Entertainment. This deal hands over HYBE’s 9.66% ownership to none other than Tencent Music, a leading Chinese entertainment giant.

The decision marks a significant power shift in the K-pop business world. SM Entertainment, home to iconic acts like EXO, Red Velvet, NCT, and aespa, will now see Tencent become its second-largest shareholder after Kakao. The deal, which involves 2.2 million shares, will be executed through a block deal at 110,000 KRW per share — about 15% lower than SM’s current market price. The transaction is set to complete on May 30, 2025.

HYBE had originally entered the fray for control of SM in early 2023 by acquiring a 14.8% stake from SM’s founder Lee Soo Man. However, after a heated corporate battle with Kakao, HYBE stepped back and began offloading its shares. A portion was sold to Kakao earlier, and the rest is now being handed to Tencent.

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So why is HYBE exiting now? According to the company, this decision is part of a strategic shift — a “reorganization of non-core assets.” In simple terms, SM is no longer aligned with HYBE’s long-term goals. Instead, HYBE is focusing on future-forward strategies like investing in new talent, expanding technology, and going global — all while managing BTS’ eventual return from military service.

Interestingly, the timing of the sale couldn’t be better. SM Entertainment’s stock has risen about 20% in the past month, buoyed by speculation that China may ease restrictions on Korean entertainment, which could reignite demand for K-pop concerts and dramas in the region.

This transaction also provides a fresh start for HYBE, freeing it from direct competition with SM and allowing it to double down on its core platforms like Weverse. With BTS expected to regroup in 2025, HYBE’s strategy appears to be aligning with a broader push for global domination.