SM Entertainment completes acquisition of Bae Yong-joon’s KeyEast
[THE INVESTOR] SM Entertainment on May 15 said it has completed the acquisition of talent agency KeyEast Entertainment from its founder and Chairman Bae Yong-joon for 50 billion won (US$46.75 mil).
Actor-turned-businessman Bae handed over his 25.12 percent stake, or 19.45 million shares, in KeyEast to the K-pop behemoth. In return, he was paid 15 billion won in cash and 35 billion worth SM’s new shares.
With the latest deal, Bae now holds 920,000 shares, or 4 percent stake in SM, becoming the third-largest shareholder after founder Lee Soo-man with 20 percent and National Pension Service with 4.8 percent.
In his new role, Bae -- who shot to stardom with his lead role in “Winter Sonata” -- will focus on managing SM’s marketing team and serve as an advisor for the global strategy of KeyEast.
SM chief Kim Young-min will join current KeyEast head Shin Pil-soon as the new co-CEOs of KeyEast.
SM, the record label known for K-pop acts like EXO, Girls Generation, SHINee, Red Velvet and TVXQ, has been on an acquisition spree to strengthen its TV series production and contents business, expanding beyond K-pop.
In March, SM announced it acquired FNC Add Culture, TV series production arm of FNC Entertainment, for 30 billion won, becoming the largest shareholder with 30.51 percent stake. FNC Entertainment, which holds 18 percent stake, follows the ranking.
With the addition of KeyEast, which houses popular stars like Kim Soo-hyun, Han Ye-seul and Ahn So-hee, SM will ramp up its market presence in TV shows and dramas, with a stronger lineup of actors and actresses, industry experts say.
The latest deal pushed SM’s shares to rise 8.52 percent to close at 39,500 won.
By Ahn Sung-mi (firstname.lastname@example.org)