Tencent invests $177 million in K-pop amid thawing China-Korea relations

Tencent invests $177 million in K-pop amid thawing China-Korea relationsTencent invests $177 million in K-pop amid thawing China-Korea relations
via MEAIYAVT 206 Liowcms / Wikimedia Commons (CC BY-SA 4.0), Ryan & Tiana / YouTube
Tencent Music Entertainment is buying nearly 10% of K-pop powerhouse SM Entertainment in a $177 million deal that would make the Chinese streaming giant the agency’s second-biggest investor as bilateral relations between Beijing and Seoul show improvement.
By the numbers: Tencent’s music arm is purchasing 2.2 million SM Entertainment shares from Hybe — the company behind BTS — for 243 billion won ($177 million) in a transaction set for today, filings show. Once completed, the deal will give Tencent Music a 9.7% ownership position, trailing only South Korean internet conglomerate Kakao and its entertainment unit, which control a combined 41.5% stake. The transaction marks Tencent’s biggest move into South Korea’s entertainment industry in years, building on existing minority stakes in rival agency YG Entertainment and Kakao Corp itself.
Why this matters: The deal unfolds as China considers ending nearly a decade of restrictions on Korean pop culture, originally triggered by Seoul’s 2016 agreement to host American THAAD defense systems. Recent developments, however, underscore continued complications — K-pop group Epex recently postponed a concert in Fuzhou citing local complications, scrapping what industry watchers had hoped would mark China’s first major Korean pop performance since 2016. Greater Chinese market access could deliver significant financial benefits to Korean entertainment companies, with SM Entertainment recording 39 billion won ($28.5 million) in concert revenues during the first quarter, up 58% from the previous year.
 
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