It has been reported in Korean media that Naver and Kakao Entertainment will soon be competing for the acquisition of stakes in SM Entertainment. The move has been interpreted as a way to expand global market activities, riding on the Hallyu wave.
According to a report by the investment banking industry, Naver and Kakao Entertainment are discussing plans for the acquisition of shares of SM Entertainment.
The shares up for grabs are said to be currently owned by SM Entertainment’s largest shareholder, Lee Soo Man. The deal may involve either all or a portion of his shares. It is also reported that both candidates are discussing methods to either trade new shares or to exchange shares, in order to come up with the most ideal deal.
Currently, both Naver and Kakao Entertainment are involved highly in the production and distribution of content. From webtoons to webnovels, music and radio, both are often competitors in this field. By acquiring a stake in SM Entertainment, it is a win-win for both SM Entertainment and them as SM Entertainment artists will be given a larger platform to expand their network.
As for how Lee Soo Man feels about this, it was reported that he has decided a partnership is necessary to further enhance the company. Allegedly, he shared with acquaintances that he had no intention of passing down his stakes in the company to his children.
Comparing Naver and Kakao Entertainment, Kakao Entertainment already has K-Pop artists under Starship and PlayM Entertainment through its affiliated labels. Kakao Entertainment’s parent company, Kakao Corp, also operates Melon, South Korea’s top digital music platform.
On the other hand, Naver owns V LIVE, as many fans already know. It also has aggressively invested into BNX, a subsidiary of HYBE Labels, as well as YG Entertainment. If Naver manages to partner with SM Entertainment as well, potential for the company becomes limitless.
In other news, Chinese production and media company, Tencent, is also looking to invest in SM Studios, a new subsidiary of SM Entertainment. SM Studios, which will launch late May, will possibly have investment funds of up to 1 trillion KRW, or close to a billion USD if it goes through.