Tencent Music to become second-largest shareholder in K-pop agency SM Entertainment
SEOUL, May 28 (Reuters) - China's Tencent Music 1698.HK, TME.N is expected to become the second-largest shareholder of major K-pop agency SM Entertainment 041510.KQ, according to a South Korean filing on Tuesday.
South Korea's Hybe 352820.KS said in a regulatory filing that it plans to sell its 2.2 million shares in SM Entertainment to Tencent Music Entertainment for 243 billion won ($177 million) on May 30.
The 9.7% stake would make Tencent Music the second-largest shareholder in SM Entertainment, after the 42% controlling stake held by Kakao Corp 035720.KS and affiliate Kakao Entertainment, according to an SM filing.
Tencent Music did not immediately reply to a request for comment. Its shares climbed 2.9% on Wednesday in Hong Kong after the announcement of the deal.
There have been signs of a potential thaw in the unofficial ban on K-pop concerts and performances in China, in place since 2016 after Beijing protested against the deployment of a U.S. anti-missile defence system in South Korea.
Restarting K-pop concerts in China would sharply increase major agencies' ticket revenue, analysts said.
Hybe, a leading K-pop agency behind supergroup BTS, acquired the SM Entertainment stake in a failed takeover attempt in 2023. Hybe said in its filing that it was selling the stake for "efficient management of investment assets".
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