As reported by Korea’s Yonhap News Agency, Big Hit Entertainment, the K-Pop powerhouse behind BTS, has revealed its intention to invest 70 billion won (approximately $63 million) in rival K-Pop company YG Entertainment. The deal will see Bang Si-hyuk-led Big Hit, and its subsidiary beNX, invest 30 billion won and 40 billion 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.
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.
beNX is the Big Hit subsidiary that developed Big Hit’s direct-to-fan app and 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. Additionally, YG Plus will now support Big Hit’s distribution and merchandise businesses.
“The two companies have always strived for the best in their respective fields, we have now begun a new chapter,” said YG Plus in a release.
Big Hit added: “We look forward to the synergy between YG Plus, which has established a strong network in a wide variety of fields such as distribution and merchandise production, and Big Hit and beNX, whose fortes are artist IP and platforms.”
“We will grow together through a wide range of collaborations that will have a wide-ranging impact on the entertainment lifestyle.”
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 15th, 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 $2.8b billion).
This article originally appeared on Music Business Worldwide.