This photo, provided by Big Hit Entertainment, shows the corporate logo for the company. (Yonhap)
Big Hit Entertainment, the agency behind global star BTS, announced on Wednesday that it plans to invest 70 billion won ($63 million) in YG Entertainment, one of the biggest K-pop agencies in South Korea.
Under the deal, Big Hit and its affiliate beNX will invest 30 billion won and 40 billion won, respectively, in YG affiliate YG Plus, the agency said in a press release following a board meeting.
With the investment, Big Hit and beNX will 7.7 percent and 10.2 percent stakes, respectively, in the YG affiliate.
beNX is a Big Hit affiliate that runs the fan community platform Weverse and related commercial platform Weverse Shop. YG plus is an affiliate of YG that focuses on music distribution and merchandising.
The two companies said they will be expanding business cooperation under the strategic partnership. YG Plus will bank on Weverse to reach out to more global fans while supporting Big Hit's music distribution and merchandising business.
Big Hit and YG both voiced anticipation over the business deal.
"We look forward to the synergy that YG Plus, which has a powerful network in various fields such as distribution and merchandising production, and Big Hit and beNX, which are strong in artist intellectual property and platforms," said Big Hit, noting the two companies will be able to grow together through the collaboration.
YG Plus called the investment a "new turning point" for the two companies.
Big Hit, established in 2005, is one of the country's biggest K-pop powerhouses that manages artists, like BTS, Seventeen and GFriend. The company debuted on the local stock market in October and has been expanding its business portfolio by acquiring smaller labels.
YG, founded in 1996, is another major force in the K-pop business that manages BLACKPINK, TREASURE and AKMU. The company also represents actors and actresses, like Gang Dong-won, Lee Sung-kyoung and Choi Ji-woo.
In a separate announcement late Wednesday, Big Hit said that leading portal operator Naver will be investing 354.8 billion in beNX through a third-party paid-in capital increase. It also said beNX will be changing its name to Weverse Company Inc.
The announcements were made after the stock market closing. (Yonhap)