HomeBusiness NewsHYBE sells entire SM Entertainment stake to Tencent Music

HYBE sells entire SM Entertainment stake to Tencent Music

HYBE exits its investment in SM, while Tencent Music strengthens ties with K-Pop.

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South Korean entertainment giant HYBE has sold its entire stake in rival K-Pop company SM Entertainment to Tencent Music Entertainment (TME) for around $177 million.

HYBE, the company behind BTS and NewJeans, sold 2.21 million shares, or 9.38%, of SM to Tencent Music on May 30, 2025, at a price of 110,000 KRW per share (about $80 each). TME is China’s biggest music streaming company and operates popular apps like QQ Music, Kugou, and Kuwo.

HYBE said it made the sale to focus on its core business and raise funds for future growth. The company explained it was “divesting non-core assets” as part of a “choice and concentration strategy.”

With this purchase, Tencent Music becomes SM Entertainment’s second-largest shareholder. The largest is still Kakao and its subsidiary Kakao Entertainment, which together own over 40% of SM.

SM Entertainment is known for managing top K-Pop acts like EXO, Red Velvet, aespa, and NCT.

This deal comes as relations between China and South Korea improve. For years, K-Pop acts were banned from promoting in China due to political tensions. But that ban may soon lift, opening up big new markets for South Korean music companies. TME’s investment suggests they expect strong demand for K-Pop in China.

This isn’t Tencent’s first investment in K-Pop. It already owns shares in YG Entertainment (home to BLACKPINK) and Kakao Entertainment, showing it’s serious about expanding its K-Pop portfolio.

Meanwhile, HYBE originally tried to take over SM Entertainment in 2023, buying a 14.8% stake from founder Lee Soo-man. HYBE then tried to buy more shares to reach a 40% stake, but failed when SM management pushed back. Kakao eventually became the top shareholder, and HYBE ended its takeover bid.

Over time, HYBE sold parts of its SM stake and has now completely exited the company.

With this sale, HYBE focuses on growing its own artists and business, while Tencent Music positions itself as a key player in the future of K-Pop.

Source: Music Business Worldwide

Hayame Kawachi
Hayame Kawachi
Hayame has spent the last six years proofreading, copy editing and adapting localizations in the manga industry. She currently serves KComicsBeat as its Managing Editor. A proud nikkei, she channels her love for anime, manga and everything in between into her work. Her current favorites include Wait For Me After School, My In-Laws Are Obsessed With Me, Link Click and Kaiju No. 8.

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