SEOUL (AFP, BLOOMBERG) - The agency behind K-pop phenomenon BTS announced a US$1.05 billion (S$1.41 billion) deal on Friday (April 2) to buy the American firm that manages Justin Bieber, Ariana Grande and other major stars.
Hybe, formerly known as Big Hit Entertainment, is investing 1.07 trillion won (S$1.27 billion) into its United States unit to acquire Ithaca Holdings, headed by US media entrepreneur Scooter Braun. The acquisition of Ithaca would be the first major foray into the US market for Big Hit Entertainment.
In a separate regulatory filing in Seoul, the company said its US unit will pay a total of US$1.05 billion to bondholders and others for the merger.
The South Korean firm will "acquire through its wholly owned subsidiary Hybe America, a 100 per cent stake in Ithaca Holdings," it said in a statement.
Mr Braun will join the board of Hybe and artistes of both entities - including BTS, Bieber and Grande - will participate in the capital increase of the South Korean company, it added.
The music industry has seen a flurry of deals amid the pandemic, which has prevented artistes from touring, their primary source of income.
Meanwhile, the growth of streaming services has boosted the value of music rights in recent years, buoyed also by low interest rates and Wall Street's interest in alternative assets.
Rock stars like Bob Dylan cashed in on their old songs, so did Mr Braun with pop star Taylor Swift's early albums, though it created tension between the music manager and the singer.
Mr Braun hailed Hybe's systems and said the tie-up would create "exponential" opportunities for new and existing Ithaca artistes. Hybe chairman and chief executive Bang Si-hyuk called the deal an "inevitable joining".
Big Hit helped popularise K-pop, with BTS' Dynamite topping the Billboard Hot 100 in 2020.
BTS were the first Asian act to be No. 1 on the US music chart since Japan-born crooner Kyu Sakamoto held the No. 1 spot for three weeks in 1963 with the song Sukiyaki.