SEOUL, Jul. 17 (Korea Bizwire) — South Korea’s top mobile carrier SK Telecom Co. and major entertainment agency SM Entertainment said Monday they will join forces through a series of stock sales among their affiliates, in order to beef up their content business and search for new opportunities.
Under the deal, SK Telecom will buy 65 billion won (US$57.6 million) worth of stocks to be sold by SM Entertainment’s affiliate SM Culture & Contents (SM C&C), to emerge as the No. 2 stakeholder in the company with 23.4 percent.
SM Entertainment will also inject 40 billion won in IRIVER Ltd., a music-device affiliate of SK Telecom, becoming the second-largest shareholder in IRIVER with 20.6 percent.’
IRIVER and SM C&C plan to use the proceeds from the stock sales to finance a series of merger and acquisition deals.
For one, IRIVER will acquire SM Mobile Communications (MC) and SM Life Design Co. (LDC) to roll out various businesses targeting K-pop fans.
SM MC was kicked off last year as a mobile content developer, with SK Telecom taking up 46 percent of the shares, while SM holds the remaining 54 percent. SM LDC is also an affiliate of SM Entertainment, which sells celebrities-related merchandise in Japan.
SM C&C will also purchase the advertisement business under SK Planet with 66 billion won.
The two companies said they will continue to expand cooperation down the road.
“The deal is significant as the top players of information communication technology and content industries joined forces,” SK Telecom said.
SM Entertainment, a major South Korean entertainment agency, along with JYP Entertainment and YG Entertainment, holds various singers and actors popular throughout Asia under its wing.
Key idol groups from the agency include Super Junior, Girls’ Generation, SHINee, EXO and Red Velvet.