SK Square-CJ ENM Invest 250 Billion KRW in Wavve

SK Square and CJ ENM, who are promoting the merger of domestic online video service (OTT) platforms Wavve and TVING, are making a strategic investment worth 250 billion KRW.

Wavve's largest shareholder SK Square and TVING's largest shareholder CJ ENM announced on the 27th that they will invest 150 billion KRW and 100 billion KRW respectively in Wavve.

Both companies will acquire newly issued convertible bonds (CB) by Wavve.

With the investment funds, Wavve plans to repay financial investors (FI) on the 28th, when the maturity of existing convertible bonds worth 200 billion KRW is due.

Wavve, which raised 200 billion KRW from financial investors in 2019, recorded an operating loss of 80.4 billion KRW last year and was in a financial state where it was difficult to independently resolve the convertible bond maturity.

SK Square and CJ ENM explained that this strategic joint investment aims to strengthen the OTT business synergy between Wavve and TVING and enhance content competitiveness.

Wavve, in which SK Square holds about 40.5% of shares, is jointly owned by the three terrestrial broadcasters KBS, MBC, and SBS, each holding 19.8%, providing terrestrial real-time broadcasting and catch-up viewing exclusively on OTT.

SK Square and CJ ENM plan to proceed with the merger into CJ ENM after going through corporate merger reviews.

The name of the OTT after the merger has not been finalized, but it is known that the option to continue using TVING is likely.

Both companies emphasized, "Through the future integration of Wavve and TVING, we will launch a K-OTT with global competitiveness, provide differentiated content to users, and contribute to the development of the Korean OTT industry ecosystem."

Han Myung-jin, CEO of SK Square, said, "We will strengthen the synergy between Wavve and TVING through strategic joint investment," adding, "We will promote the integration of the two companies to achieve future growth of the integrated OTT and contribute to the development of the Korean OTT industry."

Yoon Sang-hyun, CEO of CJ ENM, said, "Through the investment agreement between the two companies for the growth of the OTT industry ecosystem, various business collaborations such as improving customer convenience and content supply have become possible," and added, "We expect it will help increase user satisfaction and the competitiveness of native OTTs."

Meanwhile, TVING's shareholders include CJ ENM with a 48.9% stake, KT Studio Genie (13.5%), financial investors (FI) such as Zen Partners & Company (13.5%), SLL Joongang (12.7%), and Naver (10.7%). The position of KT, the second largest shareholder with 13.5%, regarding the merger has not yet been decided.