Tencent Music Entertainment has acquired a 9.7% stake in SM Entertainment, purchasing the entire block previously held by HYBE for about $177 million (243.3 billion won). The transaction, set to finalize by month’s end, makes Tencent the second-largest shareholder in SM, behind Kakao and its affiliate Kakao Entertainment, which together hold a 41.5% stake.

The acquisition expands the Chinese company’s investment portfolio in the South Korean entertainment sector, adding to its existing minority holdings in YG Entertainment and Kakao Entertainment. SM’s subsidiary DearU, operator of the fan-artist communication platform Bubble, also announcedearlier this month a partnership with Tencent Music