Photo Credit: HYBE / SM Entertainment
HYBE acquires the 14.8% share in SM Entertainment previously held by SM’s founder, positioning itself as the company’s largest shareholder.
HYBE has signed an agreement to acquire the 14.8% stake in SM Entertainment held by former chief producer and founder Lee Soo-man. This move positions HYBE as the single largest shareholder in SM Entertainment — a significant step toward integrating the expertise of both companies to become a powerhouse in the global music industry.
One of the largest music companies in South Korea, SM Entertainment, has played a pivotal role in expanding K-pop’s boundaries for more than 20 years. HYBE, an industry leader in K-pop’s global phenomenon, is home to BTS and many other massively successful artists in the genre.
Bang Si-Hyuk, HYBE Founder and Chairman, along with former SM Chief Producer Lee, agreed mutually on the shared vision for the future of the K-pop industry before signing the stock purchase agreement. Bang expressed deep respect for Lee and promised to continue his global vision.
“HYBE fully agrees with former Chief Producer Lee’s strategic initiatives, including metaverse, a muli-label system, and the sustainable vision campaign,” says Bang. “Leveraging our capabilities and resources, HYBE will further strengthen the presence of K-pop on the global stage.”
HYBE is in a prime position to improve SM Entertainment’s corporate structure in line with SM’s earlier announcement to revise its internal management structure. HYBE intends to maintain an active role in continuing SM’s governance improvement measures.
Meanwhile, Lee has opted to terminate the business agreement between SM Entertainment and his private company, Like Planning. Reiterating his commitment to improving corporate governance, Lee confirmed not to receive any fees guaranteed by the three-year sunset clause following the contract’s termination. Additionally, he agreed to sell his private shares in SM’s affiliate companies to HYBE to show his full support for the transition to improved measures.
With its extensive global network and expertise, HYBE plans to strategically partner and collaborate with SM Entertainment in three key areas: label, solution, and platform, to enable more fans worldwide to engage with and enjoy K-pop artists.