SEOUL, Feb. 7 (Korea Bizwire) — Kakao Corp., the operator of South Korea’s biggest mobile messenger KakaoTalk, said Tuesday that it has acquired a 9.05 percent stake in the K-pop powerhouse SM Entertainment Co. as part of its strategy to strengthen its entertainment business.
The company purchased 1.23 million shares for 217.2 billion won (US$173 million) and became the second-largest shareholder of SM Entertainment, according to Kakao.
The two companies also signed a business deal to share their expertise in various sectors, including tech, platform, music and content production capabilities to expand their presence in the world’s show business.
Kakao said its entertainment, media and publishing unit, Kakao Entertainment, will create strong synergy with SM Entertainment, one of the country’s top K-pop agencies, with big-name K-pop acts like EXO, Red Velvet, NCT and aespa under its belt.
The move came about a month after Kakao Entertainment secured a 1.2 trillion-won investment from Saudi Arabia’s Public Investment Fund and Singapore’s Pwarp Investment PTE.
It was the largest overseas investment raised by a South Korean content production firm.
Kakao Entertainment is well-known for popular services for web comics and novels and movie and TV series production studios, as well as K-pop record labels and artist management business.