Will Kakao, which secured 1 trillion won, acquire SM?

Will Kakao, which secured 1 trillion won, acquire SM?: COMPANY / Reporter Kim Jisun / 2023-01-09 06:44:43

This article is translated by AI company Flitto and Newsroom neural machine translation technology

Singer BoA, general producer Lee Soo-man (center), Saudi Minister [Photo = SM Entertainment]

According to industry sources on the 8th, the Saudi Sovereign Wealth Fund (PIF), led by the Singapore Investment Authority (GIC) and Saudi Crown Prince Mohammed bin Salman, recently decided to invest 1 trillion won in Kakao Entertainment.

Domestic private equity fund H&Q Korea will also invest 100 billion won to 200 billion won. Kakao Entertainment is expected to secure up to 1.2 trillion won worth of funds. The industry expects Kakao Entertainment, which has a lot of money in its hands, to accelerate its acquisition of SM again.

Kakao Entertainment has already been negotiating with SM to acquire management rights since last year. Lee Soo-man, who dominates SM, failed to narrow the gap, including the acquisition amount and treatment issue with SM's general producer.

The takeover was at a standstill. General producer Lee Soo-man has an 18% stake in SM. In addition to the general producer's stake value of about 300 billion won, it is said that he wants 'Plus Alpha' worth hundreds of billions of won.

The market sees the management deal between Kakao and SM up to 600 billion won. Kakao Entertainment has grown in size through mergers and acquisitions (M&A) in the field of intellectual property (IP) such as webtoons and web novels as well as film and drama producers and entertainment agencies. Representative singers of Kakao Entertainment include IU, Ive, MONSTA X, and The Boyz.