CJ ENM, one of the largest entertainment and media companies in South Korea, is currently in talks to buy a controlling stake of SM Entertainment.

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According to a report from Korea Economic Daily (KED), CJ ENM recently submitted a new proposal for shares of SM Entertainment and is in talks with Lee Soo-man, the founder and single largest shareholder at entertainment company. Lee currently holds 18.72 per cent and has put all of it up for sale.

While the deal is not set in stone yet, a source told KED that Lee wants to maximize his stake’s sale price and also keep his role as chief producer at SM Entertainment.  once the deal is finalized. KED says one possible scenario could involve CJ ENM spinning off its music business to merge with SM Entertainment.

If realized, the deal will allow CJ ENM secure its entertainment business, which is one of its weaker areas, per KED. The deal will also provide support for the media company’s music business, which manages artists through ten music labels, including AOMG, H1GHR Music and Amoeba Culture.

Meanwhile, Kakao Corp, which previously had expressed interest in purchasing shares of SM Entertainment, has reportedly dropped out of the bid.

SM Entertainment is recognized as one of the leading K-pop labels in South Korea, and introduced a system for casting, training and producing talent and music. Notable artists under the label’s roster include Super Junior, Girls’ Generation, SHINee, Red Velvet, NCT and aespa.

CJ ENM, meanwhile, runs 16 cable TV channels across South Korea, including drama channel tvN and music channel Mnet. The company was founded by the CJ Group, Korea’s leading film producer and distributor.