Tokyo-based cable-radio operator Usen Broad Networks is buying a 4.44% stake in South Korean label/management company S.M. Entertainment. At the same time. leading Japanese independent label Avex -- w
Tokyo-based cable-radio operator Usen Broad Networks is buying a 4.44% stake in South Korean label/management company S.M. Entertainment. At the same time. leading Japanese independent label Avex -- whose biggest shareholder is Usen with a 22.38% stake -- is boosting its stake in S.M. from 5.76% to 6.55%.
Under the deal, Avex will buy 117,721 shares in S.M. while Usen will purchase 470,886, at a price of 15,800 won ($15.32) per share. The deal takes effect Sept. 13.
In a joint statement, Avex and Usen said the purpose of the third-party allocation was to "link Avex, Usen and S.M. Entertainment Co. Ltd. together as strategic partners, so that we may market our entertainment business aggressively throughout the world through mutual cooperation."
Following the pact, S.M. will grant Avex and Usen exclusive rights to use any masters S.M. owns as content for mobile-based services.
"I'm happy that S.M. Entertainment has strong cash-financing support from Japan," comments former Avex chairman/CEO Tom Yoda, who oversaw Avex's February 2004 purchase of the label's initial stake in S.M.
In 2000, Avex and S.M. signed a licensing deal which gave S.M. the right to sell Avex products in South Korea and S.M. and Avex the right to sell S.M. recordings in Japan. It was the first such deal between a Japanese and a South Korean label.
One of the first fruits of the deal was the Japanese debut of South Korean female vocalist BoA, whom Avex developed into one of Japan's biggest-selling acts.