Big Hit Entertainment, the K-Pop powerhouse behind BTS, has revealed its intention to invest 70 billion won (approximately $63m) in rival K-Pop company YG Entertainment.
Seoul-based YG Entertainment, founded by Yang Hyun-suk in 1996, has worked with K Pop superstars like BLACKPINK, BIGBANG, 2NE1, and Psy.
Yang Hyun-suk left the company in June 2019.
As reported by Korea’s Yonhap News Agency, the deal will see Bang Si-hyuk-led Big Hit, and its subsidiary beNX, invest 30bn won and 40bn won, respectively, in YG affiliate YG Plus.
Variety reports that this investment gives Big Hit and beNX a combined 17.9% stake in YG Plus.
beNX is the Big Hit subsidiary that developed Big Hit’s direct-to-fan app / online platform Weverse, which the company’s Global CEO, Lenzo Yoon, has previously stated was one of the keys to Big Hit’s successful first nine months of 2020, during which the company’s global revenues hit $437m, rising significantly year-on-year in spite of the COVID crisis.
Weverse, which hit 10 million downloads in early 2020, will now also be used by YG Plus to reach more fans globally.
Aditionally, YG Plus will now support Big Hit’s distribution and merch businesses.
“We look forward to the synergy that YG Plus, which has a powerful network in various fields such as distribution and merchandising production, and Big Hit and beNX, which are strong in artist intellectual property and platforms.”
Big Hit Entertainment
Said Big Hit: “We look forward to the synergy that YG Plus, which has a powerful network in various fields such as distribution and merchandising production, and Big Hit and beNX, which are strong in artist intellectual property and platforms.”
In May last year, Big Hit Entertainment acquired a stake in Seoul-based K-Pop label Pledis Entertainment and is now the company’s largest shareholder.
In November, Big Hit revealed that it is expanding access to Weverse to US artists for the first time, as Weverse looks to “establish itself as a global platform designed for an all-encompassing global fan experience”.
Big Hit floated on the Korean Stock Exchange on October 15, 2020.
The company’s shares opened at 270,000 South Korea Won (approximately $235) – double its initial public offering price of 135,000 South Korea Won ($117) per share.
That share price peaked at 351,000 South Korea won ($305) on October, but closed its first day of trading at 258,000 South Korea won ($225).
Big Hit Entertainment’s total valuation at the close of day-one trading was 8.7 trillion South Korea won ($7.6 billion).
That made Big Hit founder and CEO Bang Si-hyuk’s 36.6% stake in the company worth 3.14 trillion South Korea won (approximately USD $2.8bn).Music Business Worldwide
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