HYBE completes SM Entertainment acquisition, talks Weverse, Bubble, SM 3.0, assures fans in new open letter

HYBE just shared an open letter to SM Entertainment. 

On 22 February, the Korean entertainment company shared an open letter in a statement to the press and on their official channels addressing their ongoing acquisition of SM Entertainment. In the letter, CEO Park Jiwon confirmed that they have completed the acquisition process, making HYBE the largest major shareholder with a 14.8% stake in SM Entertainment, and that they will now be in the process of resolving the issues between former Chief Producer Lee Sooman and the company. 

“As promised on February 10, HYBE resolved the governance issue between former Chief Producer [Lee Sooman] and SM, during the course of the share acquisition. SM will be moving to become a company with a transparent governance structure that prioritizes shareholder value. I would like to share more details on the similarity between HYBE and SM’s corporate philosophy, and the synergy we can collaborate to create in the coming future,” writes Park. 

OPEN LETTER TO FANS, ARTISTS, EMPLOYEES, AND SHAREHOLDERS OF SM ENTERTAINMENT pic.twitter.com/CsxqAmopFy

— HYBE OFFICIAL (@HYBEOFFICIALtwt) February 22, 2023

Park goes on to detail the plans HYBE has following the acquisition, explaining that they plan to continue to upkeep and help expand SM Entertainment’s unique brand and cultural identity. 

With a mutual corporate philosophy of building a content-orientated culture and global expansion, HYBE plans to integrate both companies’ creative capabilities to showcase further collaborative innovation. 

“As leaders and pioneers of the K-pop industry, both HYBE and SM have been triumphing on the global stage. […] Integrating HYBE and SM’s creative capabilities and content-oriented culture will showcase a historic innovation in the global scene,” writes Park. 

Working with the company’s creative network, Park shares that HYBE will support SM Entertainment to make an impact in the global music scene, adding that they will contribute their efforts to establish SM Entertainment’s SM 3.0 strategy. Furthermore, the open letter states they will work on expanding both companies’ individual fandom platforms Weverse and Bubble beyond Korea and create new opportunities leveraging both platforms. 

Lastly, Park extends his apology to those affected by the rumours surrounding their SM Entertainment’s acquisition, particularly the company’s staff, shareholders, artists, and fans. 

“I am aware of the concerns that fans, artists, employees, and shareholders of SM have, due to rumours and speculations around the company. HYBE fully respects the direction laid out in SM 3.0 growth strategy, as well as the value and vision SM’s employees and artists have created,” he writes. 

“I would like to express my regret to SM artists in particular, who may have been troubled by the turn of events. We respect SM’s artists as much as we do our artists at HYBE. Leveraging the expertise we have accumulated, we will do our best to create a brighter future for all artists under SM. This is an era of change for both companies. We wish any short-term business decisions or prejudgement by some leaders would no longer cause confusion and uncertainty. I hope the management can come to a wise and reasonable conclusion to ensure that our shared visions and business directions are on the right track.”

HYBE’s open letter comes after SM Entertainment published a video statement detailing the “negative consequences” of what they believe to be a “hostile takeover attempt” by the former. Since earlier this month, both companies, as well as Kakao Corp and Lee Sooman, have been wrapped in a corporate dispute over SM Entertainment’s acquisition.