HYBE is reportedly selling its entire stake of 243.3B KRW in SM Entertainment to China’s Tencent Music

On May 27, 2025, it was announced that HYBE Co., Ltd., South Korea's biggest entertainment company, would be selling all of its shares in SM Entertainment Co., Ltd., its primary rival. Tencent Music Entertainment Group of China will get more than 243.3 billion won (approximately $177 million US dollars) for the 2,212,237 shares, which is a 9.38% stake in the company.

This transaction underscores the shift in ownership dynamics within the K-pop industry, marking the last phase of HYBE's strategic realignment after its unsuccessful attempt to buy SM in 2023.

HYBE reportedly selling its entire stake in SM Entertainment to China’s Tencent Music: more details

HYBE, the business that makes BTS and other blockbusters throughout the world, bought 14.8% of Lee Soo-man's shares at the start of 2023. Lee Soo-man started SM Entertainment. When the company started selling its shares, its percentage of ownership was at its highest, about 15.78%.

In May 2024, after making further modifications to its holdings (purchasing 869,948 shares from Lee Soo-man, which elevated its interest to around 12.6%), it began to depart a little by the end of the year, dropping its position to about 9.38% before this most recent transaction.

Kakao Corporation and its subsidiary, Kakao Entertainment, have historically controlled most of SM Entertainment, one of the Big Three agencies in Korean pop music. Because of this ownership structure, Kakao may control a little more than 41% of SM's total shares.

Following regulators and shareholders' look into the situation, HYBE kept a small interest and stopped fighting for a friendlier governance structure under Kakao's supervision following its initial attempt to take over SM in 2023.

HYBE's regulatory filing with the Financial Supervisory Service on May 27, 2025, says how the deal will move forward:

• There were 2,212,237 common shares of SM Entertainment sold, which is 9.38% of the company.
• The price of shares is 110,000 won.
• The total is 243.3 billion won, which is more than $177 million in US currency.
• Tencent Music Entertainment Group, a part of Tencent Interactive Entertainment Group, was the buyer.
• May 30, 2025, is the day of settlement. This will happen via a block transaction that ends after the market closes.

After the purchase is done, Tencent Music will own 41.5% of SM Entertainment, making it the second-largest investor behind Kakao. With this transaction, Tencent Music has a lot of power over the long-term plans of one of Korea's most famous entertainment companies.

Recently, there has been a lot of consolidation and foreign investment in the K-pop market. Major digital businesses like Tencent, Naver, and Kakao have tried to buy shares in leading agencies so they may use content libraries, streaming platforms, and fan-engagement networks.

Instead of going for aggressive equity acquisitions, leading agencies may focus more on strategic partnerships, joint ventures, and content licensing deals, as seen by HYBE's sale. The company sells its entire 9.38% stake in SM Entertainment to Tencent Music for 243.3 billion won, ending a two-year story of strategic investments and failed takeover attempts.

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The acquisition shows how the K-pop business is changing. Making content is still important, but cross-border partnerships are becoming more important. The deal changes the ownership structure of the industry, making Tencent Music the second-largest stakeholder and Kakao the controlling shareholder.

After May 30, 2025, when the dust settles, the next major thing will be to observe how HYBE utilizes its money to pay for its second phase of growth and how Tencent Music uses its new ownership in SM Entertainment.

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