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SM Entertainment has revealed a global collaboration with Tencent Music Entertainment Group, which is set to become a significant shareholder in SM by acquiring about 2.21 million shares from HYBE Labels for over 243 billion KRW (~ $178 million USD).
As announced by SM Entertainment on May 29 KST, the two companies have officially signed a Memorandum of Understanding (MOU) on this date, committing to establish a robust framework for mutual collaboration and growth.
The MOU will cover various aspects including music distribution, development of emerging artists targeting success in the Asian market, intellectual property development, as well as event and tour planning and production in China. Initially, SM Entertainment and Tencent will collaborate to debut China’s next superstar boy group within the next 2 to 3 years. SM will leverage its expertise in talent scouting, training, and production, while Tencent will manage promotions, music distribution, and overall artist management, aiming to cultivate Asia’s premier boy group.
Furthermore, SM and Tencent will closely collaborate on IP development, including physical and digital photocards, character merchandise, pop-up stores, and multimedia content. For event production, they plan to host ‘SMTOWN LIVE‘ in Hong Kong in 2026 as the kickoff for their enduring partnership, followed by organizing nationwide tours for SM Entertainment artists in China, complete with live streaming services.
This strategic alliance aims to enhance SM Entertainment’s global presence and influence, particularly in the Chinese market, while providing Tencent an opportunity to leverage SM’s exceptional capabilities in IP development and production.
In the meantime, Tencent’s acquisition of HYBE’s shares is expected to move forward after May 30 KST.
SEE ALSO: HYBE launches its official branch in China
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