Hybe says not pursuing hostile M&A of SM Entertainment

SEOUL, Feb. 21 (Yonhap) -- Hybe said Tuesday its plan to acquire rival K-pop company SM Entertainment is not part of any hostile merger and acquisition strategy and it can help SM artists advance to the North American market if the plan is realized.

The entertainment giant behind global superstar BTS has agreed to acquire a 14.8 percent stake in SM from founder and former chief producer Lee Soo-man, and is offering to buy a further 25 percent of the company from other shareholders. SM, however, has strongly criticized the acquisition plan, calling it a hostile merger and acquisition.

"We don't think the company's acquisition of SM shares is a hostile merger and acquisition," Hybe CEO Park Ji-won said in a conference call on the company's performance.

"That's because we agreed to buy shares held by SM's largest shareholder (Lee) through mutual consent and publicly offered to buy shares from smaller shareholders on the same condition as the largest shareholder."

Hybe also has no intention to be hostile to the current SM management, Park stressed.

He then suggested Hybe's acquisition of the rival will be a big synergy in the industry.

"Hybe can help SM artists advance into the North American market using BTS' great achievements in the market, and the network and know-how of Ithaca Holdings," he said. "SM's overwhelming infrastructure in Southeast Asia and China can help Hybe artists enter the markets, too."

Scooter Braun joined the board of Hybe in April 2021 after his investment company, Ithaca Holdings, merged with Hybe.

Park also commented on SM's recently announced business blueprint centered on establishing a multi-production and label system, and using intellectual property rights of its artists also for products other than music, such as merchandise and games.

He said since both strategies have long been pursued by Hybe, it can help SM carry them out using its resources and know-how if the acquisition is made.

sshim@yna.co.kr
(END)