SM Entertainment has confirmed they will be partnering with Kakao and will move forward with their SM 3.0 plan.

In a statement to various media outlets including Herald Pop, SM Entertainment has confirmed they will be working with Kakao and will move forward with their SM 3.0 plan that the company previously outlined.

SM Entertainment stated: "SM Entertainment will respect HYBE and Kakao’s agreement to have HYBE halt their attempt at acquiring SM Entertainment’s management rights.

With this agreement, SM will speed up our SM 3.0 strategy that we promised to shareholders, partners, fans, and artists to achieve our future vision of leaping forward into becoming a global entertainment company, focused on our fans and shareholders. Through this, we will continue to expand our corporate values and stakeholder returns for all shareholders.

In a statement today, Kakao stated that they will ensure autonomous and independent operations for SM to respect SM Entertainment’s most powerful assets and driving forces, which are their executives, artists, and fandom. Kakao will help speed up the global growth for the company, focusing on future visions and strategic direction, which includes the plan for SM 3.0 that was presented by the current management. The board of directors for SM 3.0 will be newly launched at the upcoming shareholders’ meeting on March 31 and will create the world’s best “IP x IT” synergy with Kakao and open up the “Next Level” of the K-Pop industry.

We would like to express our deepest gratitude to the SM shareholders, fans, employees, artists, and all stakeholders who have encouraged and supported SM Entertainment despite the unexpected confusion since the announcement of SM 3.0 back on February 3."

It was previously announced that HYBE would be backing out of the race to acquire SM Entertainment after participating in negotiations with HYBE.

In an exclusive report, Money Today confirmed that as of March 12 (KST), Kakao will acquire SM Entertainment by becoming its largest shareholder—sealing the deal by purchasing 35% of SM Entertainment’s shares at the price of ₩150,000 KRW (about $114 USD) per share.

The report also confirmed that HYBE is dropping its pursuit of SM Entertainment—ending the aggressive acquisition race that began in Feb 2023. Earlier, HYBE was reported to be “striking back”; But an insider told Money Today that “Kakao and HYBE have come to an agreement with negotiations after negotiations.”

Going forward, Kakao will bring on a board of directors to operate SM Entertainment and manage its business, while HYBE will work toward a platform business partnership instead. None of HYBE’s recommended personnel will be included in the new board of directors at SM Entertainment, according to the report.

The report suggested it is possible for Kakao to attempt a complete merge of Kakao Entertainment and SM Entertainment—though this piece of information has not been verified.

An insider mentioned in the report that: "Kakao has a lineup of the recommended board of directors. This new board will become the heart of SM Entertainment’s business management. HYBE is going to stop purchasing more shares. Instead, HYBE and SM Entertainment will partner to develop a platform business. Both parties concluded, after negotiations, that it is unreasonable to continue the battle of acquisitions while bleeding out in finances. As announced earlier, Kakao will become the largest shareholder after purchasing 35% of SM Entertainment’s shares at the price of ₩150,000 KRW (about $114 USD) per share."

Kakao has been working toward the ownership of SM Entertainment for close to two years. And now, the end is near: With ₩1.39 trillion KRW (about $1.05 billion USD) in total for the acquisition, SM Entertainment will belong to Kakao. Kakao will, as planned, complete its purchasing of the shares before March 26.