K-pop company SM Entertainment’s agency-wide concert ″SMTOWN Live″ held in Mexico City and Los Angeles in May [SM ENTERTAINMENT]

K-pop powerhouse HYBE will sell all of its 9.4 percent stake in SM Entertainment to China’s Tencent for 200 billion won ($146 million), the BTS agency said Tuesday.

HYBE said it will dispose of 2,212,237 shares of SM Entertainment, which represents a 9.38 percent stake in the company, in a regulatory filing on Tuesday.


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The shares will be sold at 110,000 won each, lower than Tuesday’s closing price of 129,900, according to the Korea Exchange. The sale is scheduled to be completed Friday after the market closes through an after-hours block trade.

HYBE acquired the stake in 2023 during a high-profile battle to take over SM Entertainment’s management rights. HYBE first bought 14.8 percent of SM Entertainment from the latter’s founder Lee Soo-man. HYBE later sold 8.62 percent to Kakao in March 2023 and sold off 3 percent more last year.

“We divested noncore assets as part of a choice and concentration strategy,” HYBE said. “Secured funds will be used to secure future growth engines.”

Tencent will be placed as the second largest shareholder of SM Entertainment, following Kakao and Kakao Entertainment — which respectively own 21.61 percent and 19.89 percent, totaling 41 percent.

“We will strengthen our partnership with Tencent Music Entertainment,” said SM Entertainment.

SM Entertainment manages major K-pop groups, including a China-centered boy band named WayV.

BY YOON SO-YEON, YONHAP [yoon.soyeon@joongang.co.kr]