Kakao Entertainment is in the final stages of a merger and acquisition deal with SM Entertainment

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According to media reports, Cocoa Entertainment entered into the final stage of the merger and acquisition deal with SM Entertainment.

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According to business insiders, negotiations between Cocoa and SM about mergers and acquisitions go smoothly. The structure of the merger and acquisition deal was developed earlier this month, and both sides are currently discussing more specific details. It is assumed that the merger and acquisition will be that Cocoa Entertainment will acquire both existing and new shares in SM Entertainment.

Initially a sale offer made by the CEO SM Entertainment Lee Su Man, consisted of 18.53% of the total number of shares of the agency. However, industry insiders believe that to ensure exclusive rights to govern Cocoa must “take at least 1/3 of all shares.”

As a result, it is predicted that SM Entertainment will transfer approximately 33% of the shares during the merger and acquisition transaction with Cocoa. This figure is noteworthy in that it will play a key role in minimizing any restrictions or restrictions on exclusive management rights. Cocoa. Acquisition of 33% of the total number of shares SM Entertainment will allow Cocoa bypass most decisions that require a vote of the shareholders’ council, especially in areas such as policy changes, the appointment of key officials, etc.

Meanwhile, Cocoa Entertainmentwhich announced a merger with the music streaming service Melon in June 2021, seeks to increase its net worth.

According to business insiders, the first business venture Cocoa Entertainment after merging with SM Entertainment will launch its own over-the-top OTT media service with exclusive content offered by artists SM Entertainment. The platform will join competitors who currently provide streaming services in South Korea, such as Netflix, Watcha, Wavve, Coupang Play and Disney +.

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