K-pop giant HYBE aims to raise $380m for US M&A

HYBE, the South Korean music agency behind BTS and Ariana Grande, is reportedly looking to raise around 500 billion Korean won (approx USD $380m) to fund acquisitions in the US.

The Seoul-based K-pop giant “is in talks with investors to secure equity financing,” according to a report from Bloomberg, “and is open to having both strategic and financial partners”.

It comes after HYBE chairman Bang Si-Hyuk spoke about his company’s ambitions to expand its global presence via M&A and diversify its sphere of influence beyond K-Pop in the global music business.

In a March interview with CNN about the company’s US M&A strategy, Si-Hyuk notes that “globally, [K-pop] is not occupying much of the market”.

He added: “On the other hand, Latin music and afrobeats is very rapidly growing. So being where we are, it is more urgent to increase the exposure. For that purpose, I’m taking over labels and management companies in America to be able to build the infrastructure.”

“Globally, [K-pop] is not occupying much of the market… [so] it is more urgent to increase the exposure”

HYBE’s $1 billion-plus acquisition of Scooter Braun’s US-based Ithaca Holdings was a big step in bringing numerous non-K-pop operations into the fold, via HYBE America.

The deal saw HYBE take ownership of country music giant, Big Machine Label Group, as well as Braun’s own management company, SB Projects (home to Justin Bieber and Ariana Grande).

In February, HYBE expanded further in the US entertainment business when HYBE America, led by Braun, acquired Atlanta rap powerhouse QC Media Holdings or Quality Control, home to acts such as Lil Baby, Migos, Lil Yachty and City Girls, in a deal worth $300 million in total.

That acquisition came around the same time a bidding war broke out between HYBE and South Korea’s Kakao Entertainment for rival K-pop company, SM Entertainment.

In February HYBE acquired a 14.8% stake in SM Entertainment, for around $335m via the acquisition of shares from Lee Soo-man, SM Entertainment’s estranged founder.

HYBE planned to acquire a 40% stake in SM Entertainment but officially ended its takeover bid on 12 March. Kakao Corp. is now the largest shareholder in SM Entertainment though Bloomberg reports that HYBE still owns around an 8.95% stake in SM.

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