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Kakao Entertainment and SM Entertainment announce integration of their North American operations
By Chris Cooke | Published on Wednesday 2 August 2023
South Korean entertainment companies Kakao Entertainment and SM Entertainment yesterday announced the integration of their operations in North America with the aim of “accelerating global growth and expansion”.
It follows the eventful but ultimately successful bid by Kakao earlier this year to acquire a controlling stake in K-pop powerhouse SM.
“The two companies will leverage their respective strengths to create a great synergy in North America”, they said in a statement yesterday. “SM Entertainment brings its vast pool of global intellectual property and production capabilities, while Kakao Entertainment contributes its music distribution network and multi-label system”.
The combined North American business will “help artists from both companies quickly expand their influence around the world, while also actively developing and investing in new IP to further enhance their competitive edge in the global music business”.
“The integrated corporation will also prioritise the discovery of local artists and music IPs in North America” they add, as well as pursuing “strategic investment” opportunities “particularly in partnership with overseas labels”.
Joseph Chang, President of Kakao Entertainment America, will head up the combined operation. He says: “The new integrated corporation in North America will help us accelerate the global expansion and growth of artists under Kakao Entertainment and SM Entertainment”.
“We will prove”, he adds, “the growth potential of Kakao Entertainment’s music business, which encompasses planning, production, and distribution of music and artist IP in the global market”.
SM Entertainment founder Lee Soo-man opposed the deal with Kakao when it was first announced earlier this year and initially persuaded rival K-pop firm Hybe to mount its own bid to buy a controlling stake in the SM business. However, ultimately Hybe bailed on that plan and the Kakao/SM deal went ahead.
