Seoul/Hong Kong
CNN
 — 

HYBE, the administration company behind celebrity boy band BTS, will develop into the most important shareholder of its Ok-pop rival, SM Leisure.

The transfer strengthens HYBE’s dominance in South Korea’s music business, the place it’s already the most important participant, even because it seeks to develop overseas.

The South Korean leisure giants introduced the deal Friday, with HYBE set to choose up a 14.8% stake in SM Leisure for 422.8 billion Korean received ($334.5 million).

SM was based by legendary music producer Lee Soo-man, who’s extensively referred to in South Korea as “the godfather of Ok-pop.” The corporate is understood for representing hit artists, reminiscent of NCT 127, EXO, BoA and Women’ Technology.

Information that the 2 corporations have been becoming a member of forces fired up traders. SM Leisure’s shares soared 16% in Seoul on Friday. HYBE’s inventory initially rose 3%, earlier than paring positive factors to shut down 1.5%.

Outdoors of BTS, HYBE additionally represents distinguished bands reminiscent of NewJeans, Tomorrow x Collectively and Seventeen.

However its marquee act is at the moment on hiatus. Members of BTS began particular person obligatory navy service in South Korea late final 12 months, and the group as a complete is predicted to reconvene round 2025.

Now, HYBE is popping its consideration elsewhere.

“This acquisition represents a serious step by HYBE to combine the worldwide experience of each corporations to develop into a sport changer within the world music business,” the corporate stated in a press release.

HYBE has been taking steps to develop its world attain. On Thursday, it introduced one other main deal in the USA, saying it might purchase the proprietor of High quality Management, a hip-hop label that represents in style artists together with Migos and Lil Yachty.

That deal will assist HYBE construct a stronger presence within the US music market, in keeping with Sunhwa Lee, an web and leisure analyst at KB Securities. In a report Thursday, she famous that the corporate’s broader ambitions have been “to transcend the boundaries of Ok-pop and develop new world artists throughout varied genres.”

“This partnership is an important a part of our progress plan to innovate the leisure business via a diversified portfolio,” HYBE Chairman Bang Si-Hyuk stated in a press release. “We are going to work collectively to proceed including depth of hip-hop to the worldwide music business.”

Bernie Cho, a Seoul-based music business govt, stated the 2 offers introduced have been in contrast to something he’d seen.

This “will be the greatest one-two energy punch I’ve ever seen or heard [of] within the historical past of the Ok-pop business,” stated Cho, president of DFSB Kollective, a music artist and label companies company.

He stated the offers had the potential to place HYBE in the identical league because the “massive three” main report labels: Sony

(SNE), Common and Warner Music.

“HYBE, of their post-BTS stage, have actually surprised and shocked followers and monetary analysts by actually sensible, actually savvy enormous offers,” he added.

In 2019, BTS accounted for as a lot as 90% of income at its administration firm, then often known as Large Hit Leisure. That left analysts involved that the agency, later renamed to HYBE, was overreliant on the band.

Since then, nevertheless, HYBE has expanded its roster.

Lately, its slate has grown to incorporate different world celebrities, together with Justin Bieber, Ariana Grande and Demi Lovato, who’re represented by a crew underneath HYBE’s US subsidiary.

The South Korean agency has additionally has a tie-up with Large Machine Label Group, an affiliate that oversees among the high artists in nation music, reminiscent of Sheryl Crowe, Rascal Flatts and Tim McGraw.

“HYBE is now not a Ok-pop juggernaut. The Ok has now develop into silent,” stated Cho. “They’ve develop into a pop music juggernaut.”