SEOUL, May 27, 2016 /PRNewswire/ -- YG Entertainment ('YG') today announced that the company will raise a total investment of US$85 million from Tencent and Weiying Technology.
Min-Suk Yang, CEO of YG Entertainment, will sign the investment agreements in a ceremony with Suman Wang, General Manager of Film/Drama Department and Editor in Chief of Tencent Video, Lin Ning, CEO of Weiying Technology at Hyatt Hotel in Seoul on May 31st. At the ceremony, the three parties including Korea's leading content provider YG, Tencent, a leading provider of Internet value-added services in China and China's number one online ticketing company Weiying Technology, will jointly announce their strategic investment and plans for future growth in China based on collaborative efforts.
YG will issue new common shares amounting to US$55 million to a wholly owned subsidiary of Tencent and Fengying (100% owned investment SPC of Weiying Technology). At the same time, the two investors decided to buy US$30 million in aggregate from YG's largest shareholder, Hyun-Suk Yang and its CEO, Min-Suk Yang.
Weiying Technology and Tencent will respectively invest US$55 million and US$30 million and hold 8.2% and 4.5% in YG, becoming the third and fourth largest shareholders of YG after L Capital Asia, the investment arm of LVMH Group.
Regarding the significance of their partnership and collaboration, YG Entertainment said, "YG has seen over 30% growth every year for the past ten years and in order to maintain such strong growth, YG must expand its business in the Chinese market. As such, YG has been looking for the right partner in China for the past year and decided to partner with Tencent and Weiying Technology." The company added, "In the near future, YG will establish a joint venture in China with the partners to expand the activities of YG artists, actors and actresses and discover and nurture local Chinese artists."
Tencent commented, "The move deepens our already successful relationship with YG, as evidenced by the exclusive content partnership between QQ Music and YG. Leveraging our extensive user reach, multi-platform capabilities and deep understanding of the China market, we look forward to working with YG to meet the huge appetite in China for popular Korean entertainment such as music, concerts and variety shows, and to exploring new business opportunities."
Weiying Technology commented, "Weiying is a fast growing internet company with roots in online ticketing, and became a major player in entertaining business in China within the past 2 years. We truly believe online platform with offline capability like Weiying and Tencent, in-depth linked with the best content provider like YG, could make an enormous combination and magnify the value of contents in new market, like 10 times."
Weiying Technology operates the mobile ticketing application called Wepiao, which runs on Tencent's platforms including QQ and Weixin. The company sells tickets for movies, shows and sporting events online and has over 20 million active users. Weiying Technology acquired Gewara, the second largest player in the ticketing market last year, to reinforce its number one position in the Chinese market. Based on its online ticketing business, Weiying Technology is expanding its business scope to the content development area including film production and concert organization.
Tencent operates the most popular social and media platforms in China, including QQ and Weixin/WeChat for communications, QQ Music for music content and Tencent Video for video content. Tencent has been working with YG since 2015 with QQ Music exclusively distributing YG's music and MV content in China. YG and Tencent also plan to co-produce media content together in the near future.
SOURCE Tencent Holdings Limited