HYBE completes SM Entertainment acquisition, issues open letter: “This is an era of change for both companies”

nme.com:

HYBE Labels CEO Park Ji-won has issued a new open letter addressing the K-pop company’s recent acquisition of the majority stake in competing label SM Entertainment.The statement was published in Korean, English and Japanese earlier today (February 22) via HYBE’s official Twitter.

It announced the completion of HYBE’s acquisition of a 14.8 per cent stake in SM, a deal which the company struck with SM founder and former chief producer Lee Soo-man earlier this month.This officially makes HYBE, home to the likes of BTS, SEVENTEEN, NewJeans and more K-pop acts, the single largest shareholder in SM.

The company, which grew 41.6 per cent in 2022 and raked in an approximate revenue of KRW1.78trillion (£1.12billion), has also offered to purchase another 25 per cent stake in the agency from minority investors.According to Yonhap, HYBE said in a regulatory filing that it had paid for the purchase – KRW422.8 billion worth of shares from Lee Soo-man, who had 18.46 per cent stake in HYBE when the deal was struck – earlier than scheduled.“As promised on February 10, HYBE resolved the governance issue between former Chief Producer Lee and SM during the course of the share acquisition.

SM will be moving to become a company with a transparent governance structure that prioritises shareholder value,” Park wrote in the open letter, before going on to articulate “the similarity between HYBE and SM’s corporate philosophy and the synergy we can collaborate to create in the coming future”.Park’s statement outlines plans for HYBE and SM to integrate their “creative capabilities and content-oriented culture” to “showcase a historic innovation in the global scene”.