[Asia Economy Reporter Lee Isul] CJ ENM and SM Entertainment have taken a cautious stance regarding reports that their merger and acquisition agreement is imminent.
On the 21st, CJ ENM stated, "Nothing has been decided yet," but added, "We are keeping various possibilities open."
SM also said, "We are discussing with multiple companies from various angles," and denied the claim, saying, "It is not true that the acquisition contract will be signed on the 22nd."
SM, a first-generation domestic entertainment company, has been negotiating with several companies including Kakao, Naver, and CJ ENM to sell the 18.73% stake held by founder and largest shareholder, Chief Producer Lee Soo-man. Recently, after Kakao expressed its intention to withdraw, CJ emerged as the leading acquisition candidate.
On the same day, a media outlet reported that CJ would sign a merger and acquisition agreement with SM the following day, the 22nd. CJ is said to value SM at around 3 to 4 trillion won and plans to purchase Lee Soo-man's shares for approximately 600 to 700 billion won, while guaranteeing his authority as Chief Producer.
Recently, there has been a strong wave of change in the entertainment industry. Following HYBE, the agency of BTS, partnering with the portal Naver, a coalition of HYBE, YG, which houses groups like BLACKPINK and G-Dragon, and Naver has been formed. SM's moves are not unrelated to this. It appears to be an acknowledgment of the importance of cooperation with platforms that support K-pop content.
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