By Chung Ah-young
SM Entertainment, a leading entertainment agency, denied a report Tuesday that Alibaba, China’s online retail giant, is investing 100 billion won in buying a stake in it.
“The report is not true, as nothing has been decided concerning the amount and way of investment. Alibaba is one of our Chinese business partners. We are now discussing expanding business in China,” said an official of SM Entertainment.
The Chinese e-commerce company is conducting due diligence on SM and is seeking to become SM’s second-largest shareholder through a stake buy, a vernacular economic daily reported, citing industry sources.
After the report, the SM stock price soared up to 37,750 won, Tuesday, up by 3,850 won or 11.36 percent from the previous session.
Tencent, a Chinese Internet firm, recently announced its plan to acquire a 28 percent stake in Korea’s CJ Games for $500 million.
Through the investment, Tencent will become the third-largest investor in the Korean gaming company.
The deal is part of the Chinese firm’s moves to strengthen its competitive edge against Alibaba’s growing global presence.
China's film/TV production and distribution company Huace is set to become the second-largest shareholder in one of the nation’s top Korean film distributors, Next Entertainment World (NEW).
The Chinese company signed a memorandum of understanding to pay $52.7 million for a 15-percent stake in October.
China's Juna International has recently bought 3.4 million shares of Chorokbaem Media, Korea's largest drama production company.
Experts said that since Korea and China agreed to sign a free trade deal on Nov. 10, Korean content companies are expected to expand their business in China.
Under the deal, China will open its entertainment market wider to Korea, prompting Korean companies to collaborate with Chinese firms to produce cultural content including dramas, films and K-pop.