HYBE Offloads Its Stake in K-Pop Rival SM Entertainment

South Korea's HYBE has sold its 9.38% stake in K-pop firm SM Entertainment to Tencent Music Entertainment (TME). The deal is said to be worth $177 million at current exchange rates.

The Main Players

• SM Entertainment is home to some of K-pop's most prominent artists such as Super Junior, EXO, Girls' Generation, Red Velvet, aespa, NCT and RIIZE.

• Tencent Music is China's largest owner of music streaming services, operating platforms such as QQ Music, Kugou Music, Kuwo Music and WeSing.

• TME is buying 2.21 million shares at 110,000 South Korean won (roughly $80) each.

• As per Variety, the deal is set to close on May 30.

• SM Entertainment plans to "work more closely with Tencent Music" following the sale, as per South Korean news agency Yonhap.

Improving Relations

• As per Music Business Worldwide (MBW), Tencent Music's investment in SM coincides with reports China will soon be lifting its ban on South Korean cultural and entertainment content imports.

• The ban stretches back to 2017 and was in retaliation to the deployment of a U.S. missile system in South Korea.

• When lifted, it could pave the way for more K-pop ticket, album and merch sales in China, where K-pop acts have been unofficially banned from performing.