SM Entertainment Plans On Reaching Out To Korea’s Fair Trade Commission Regarding HYBE’s Acquisition Of Its Shares

SM Entertainment will reach out to the Fair Trade Commission regarding HYBE‘s purchase of Lee Soo Man‘s shares.

According to an SM Entertainment representative who spoke with CBS No Cut News on February 21, the label plans on submitting a letter of opinion.

We plan on submitting our opinions to the Fair Trade Commission in person.

— SM Entertainment

Previously, SM Entertainment stated they were against HYBE’s “hostile” acquisition. The label also criticized the acquisition for not being pre-screened by the Free Trade Commission and hence exposing SM Entertainment to great risks.

If the Free Trade Commission vetoes the sale due to a threat of a monopoly, there will be an influx of SM Entertainment shares pouring into the market, which will have a negative effect on the stocks. If the commission approves a conditional merger, then there is a chance SM Entertainment will have to reduce the size of its businesses to meet the commission’s requirements.

The Free Trade Commission is the regulatory authority in Korea’s public marketplace. The commission was established to prevent market monopolies. The commission has the power to veto HYBE’s acquisition in the case it deems the purchase would make HYBE a monopoly.

Stay tuned for updates.