SEOUL, South Korea (CelebrityAccess) — South Korean technology company Kakao announced it has acquired 9.05% stake in K-Pop giant SM Entertainment.
The deal, which Kakao characterizes as an expansion of their music and content business, is part of the company’s ‘Beyond Korea’ initiative, heralding global expansion plans.
According to Kakao, they acquired 1,230,000 new shares issued by SM Entertainment in the form of a third-party allocated paid-in capital increase and securing 1,140,000 shares (based on conversion to common stock) through the acquisition of convertible bonds. The deal will see Kakao become the second largest shareholder of SM Entertainment.
Kakao hopes to leverage SM Entertainment’s substantial reservoir of K-pop IP such as Girls Generation, Red Velvet and F(x) with global audiences.
Kakao’s subsidiary, Kakao Entertainment, will contribute planning and production capabilities, platforms, and artists, news coverage, music, and media, amplified by relationships with international partners.
In addition, the three companies will focus on emerging technologies such as AI and expand live performances in South Korea through Seoul Arena, a major new performance venue currently being planned for Seoul that will be operated by Kakao.
“Through this investment and cooperation, we expect that the two companies will be of great help to each other in responding together to the fierce competition in the global music and content market and targeting the global mainstream of K-content.” In the future, we will contribute to the expansion of K-Culture’s global influence through multifaceted cooperation,” stated Bae Jae-hyun, CEO of Kakao Community Investment.