HYBE and SM are two of the largest K-pop agencies, and analysts said the SM takeover would further solidify HYBE's position as the industry leader.
SM, founded in 1995, was at the forefront of taking K-pop global with acts like Girls' Generation and EXO. Jina Ahn, an analyst at eBest Investment & Securities, said the deal would give HYBE a line-up of K-pop artists from multiple generations as well as expanding its range of foreign artists. "It will dispel the concerns over the slowdown of profit growth caused by BTS' hiatus," Ahn said in a note.SM and HYPE should be able to achieve cost savings and a larger scale from combining their platform, solution and music label businesses, according to Lee Ki-hoon, an analyst at Hana Financial Investment Co.
In a town hall meeting with staff on Monday, HYBE CEO Park Ji-won said he respected SM's legacy and promised to ensure the label's independence, Yonhap reported on Tuesday. HYBE declined to comment.