Tencent Holdings is snapping up a nearly 10 per cent stake in SM Entertainment valued at about US$180 million, marking a rare Chinese investment into a South Korean company in recent years.
Shenzhen-based Tencent will buy the stake from K-pop band BTS’ management agency Hybe, which is selling its remaining 2.2 million shares in SM Entertainment at 110,000 won (US$80.34) each, a 15.3 per cent discount to Tuesday’s close, according to a regulatory filing.
The move comes as Beijing is widely expected to lift its nearly decade-old unofficial ban on K-pop performances in mainland China. That potentially opens South Korean companies, such as SM Entertainment, to resume music distribution through the relationship with Tencent.
Before the restrictions, China was among the fast growing markets for K-pop.
China imposed the so-called K-wave ban in 2016 in retaliation for South Korea allowing the US military to deploy a missile defence system called THAAD, or Terminal High-Altitude Area Defence, in its soil.
Tencent, which runs the world’s biggest video-gaming business by revenue and China’s largest social-media operation, was not immediately available for comment.
