SM Entertainment, Kakao Corporation, and Kakao Entertainment Inc. decided to enter into a strategic partnership in various fields on February 7. It was also announced on the same day that Kakao had secured a 9.05% stake in SM Entertainment, thus becoming the second largest shareholder of SM Entertainment. With this, the inquiry disclosure that has been going on since May 2021 between SM and Kakao will come to a close with a happy ending.
Through this investment and business cooperation, the three companies agreed to pursue mutual strategic common interests by utilizing each other's business capabilities. It was decided to maximize synergy between each company by co-planning K-POP artists through global auditions and promoting global management business together in overseas locations. In addition, it plans to accelerate IP monetization by converging SM's powerful IP with Kakao's various platforms and AI technologies to strengthen content competitiveness and expand its global market share.
SM plans to aggressively invest the funds raised during this time in the global music publishing business, global business expansion, and acquisition of domestic and foreign labels to promote the SM 3.0 strategy. This is expected to accelerate the implementation of the SM 3.0 strategy announced on February 3. Co-representatives Lee Seong Soo and Tak Young Joon of SM said, "Through this strategic partnership with Kakao, SM is expected to secure a strong growth engine to develop into a leading global entertainment company."
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