YG lures $85 mln investment from Chinese companies

By Park Sae-jin Posted : May 27, 2016, 17:00 Updated : May 27, 2016, 17:00

[Courtesy of YG Entertainment]


YG Entertainment said Friday that two Chinese companies -- Tencent and Beijing Weiying Technology -- have agreed to put a total investment of $85 million into the South Korean music and entertainment group.

The deal is part of YG's ambitions to expand its presence in China where the popularity of South Korea's pop culture "hallyu" has grown rapidly. YG already maintains its partnership with Yue Hua Entertainment, a major Chinese entertainment group.

YG said its CEO Yang Min-suk would sign a deal next week in Seoul with Suman Wang, who is responsible for the video, film and drama segment of China's biggest SNS platform company Tencent, and Ning Lin, CEO of China's top mobile ticketing service, Weiying.

YG said it would issue shares worth $55 million for Weiying and transfer shares worth about $30 million owned by its chief producer Yang Hyun-suk and Yang Min-suk to Tencent. The Chinese firms will become YG's third and fourth largest shareholder respectively. Weiying will hold an 8.2 percent stake in YG while Tencent will control 4.5 percent.

Along with an investment deal, YG said it would disclose its strategic partnership with the two Chinese companies.

YG operates a record label, talent agency, clothing line, cosmetics brand, event management and concert production company, music production company, and music publishing house. It is one of the top three labels in the K-pop industry, alongside SM Entertainment and JYP Entertainment.

"We think an expansion of our business in China is important in maintaining our growth," YG said in a statement, adding it would build a joint venture with China, increase activities by YG artists, and cultivate Chinese artists.

Tencent said the deal would help the Chinese company broaden its business portfolio into hallyu-related businesses and other fields. YG has distributed its music and video through Tencent.

Aju News Lim Chang-won = cwlim34@ajunews.com
 
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