CJ ENM the New Owner of SM Entertainment? Media Outlet Explains Why CJ Will Most Likely Acquire the Agency

After KAKAO withdrew from the acquisition battle of SM Entertainment, CJ ENM and HYBE stand as the two strongest candidates that will most likely become the new owner of one of the largest entertainment agencies. However, according to a Korean media outlet, CJ holds the biggest chance of winning the battle - and here's why. 

On October 17, Kyunghyang newspaper, a major daily media outlet in Korea, addressed one of the biggest issues in the entertainment industry: the new owner of SM Entertainment amid the strong acquisition market.

In the past, KAKAO was mentioned as the strongest candidate for the acquisition; however, following its withdrawal, CJ ENM draws attention as the possible winner.

Here are the Reasons CJ ENM is Now the Strongest Candidate to Acquire SM Entertainment

CJ ENM is the New Owner of SM Entertainment? Media Outlet Explains Why CJ Will Most Likely Acquire the Agency
(Photo : CJ ENM (News1))

On October 17, an industry official confirmed that General Producer Lee Soo Man of SM Entertainment is currently negotiating with CJ Group.

In particular, Lee Soo Man holds the largest stake of 18.72% of the company, and the two companies are negotiating with the acquisition price of 600 billion won, considering SM's market cap of 1.82 trillion won and management premium.

According to the media outlet, CJ ENM is a strong candidate not only due to its direct and continuous communication with Lee Soo Man but due to its synergy that will surely dominate the entertainment industry when combined.

To explain, CJ ENM currently has 16 channels, including tvN and Mnet. The group also holds some of the largest management companies in online video service (OTT), TVing.

If the acquisition happens, CJ ENM will not only benefit from it, but SM Entertainment can also give more opportunities to its celebrities and K-pop artists as the leading company in the music sector, after the merger.

CJ ENM is the New Owner of SM Entertainment? Media Outlet Explains Why CJ Will Most Likely Acquire the Agency
(Photo : SM Entertainment (News1))

It is also possible to strengthen cooperation with the fandom platform UNIVERSE, jointly joined by NCsoft and CJ ENM against Weverse.

Media outlets even reported, "CJ ENM will split the music sector into subsidiaries and merge with SM," adding, "Director Lee wants to manage the integrated company," but CJ ENM and SM are cautious about "not knowing what will happen."

ALSO READ: CJ ENM Plans to Release K-pop Movie in Hollywood Starring K-pop Idols in 2023

Why SM Entertainment Won't Consider HYBE as Its New Owner

While HYBE and Naver initially considered acquiring SM Entertainment as the "dark horses," but chances are truly weak due to SM's "pride."

In context, HYBE exists in the same idol industry as SM, which is considered as the "original idol agency."

CJ ENM is the New Owner of SM Entertainment? Media Outlet Explains Why CJ Will Most Likely Acquire the Agency
(Photo : HYBE {News1))

Thus, there is a strong possibility that SM will not let HYBE acquire them to live up to its name — and the gap became wider when the corporation joined hands with Naver.

The HYBE-Naver partnership created an emotional gap against SM Entertainment.

In March, HYBE's fandom platform Weverse, which includes BTS and Naver's K-pop live video service V LIVE, decided to integrate, and on top of that, YG Entertainment, home to BLACKPINK, formed a huge alliance of "Naver-HYBE-YG."

As a result, competitors' awareness of crisis has increased as SM Entertainment also has its own fandom community and messaging platform, Lysn Bubble, along with "KAKAO-SM-JYP."

READ MORE: What are the Reasons HYBE, Kakao, and CJ Want to Acquire SM Entertainment? Lee Soo Man Trends Amid Acquisition Battle

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Written by Eunice Dawson

Tags
SM Entertainment
CJ E&M
kakao

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