The fierce battle between HYBE and Kakao over the acquisition of SM Entertainment has reached a conclusion after a month. Kakao will take over the management of SM, while HYBE will work together on the platform business.

HYBE and Kakao both released statements on March 12 and announced details of their agreement concerning the acquisition of SM.

HYBE announced, “We determined that the market was showing signs of overheating due to the competition with Kakao and Kakao Entertainment,” and said that the company would end its takeover bid for SM. The company explained the reason and said, “The decision was made after comprehensively taking into account the potential negative impact on HYBE’s shareholder value.”

The price of SM shares more than doubled in a month after HYBE and Kakao both jumped in to take over the entertainment company and made tender offers.

In the general meeting of SM shareholders scheduled for March 31, HYBE and Kakao were expected to engage in a battle with their votes to form the board of directors, but now that HYBE has abandoned its takeover bid, the three HYBE director candidates will step down.

HYBE announced that the two companies reached an agreement on a partnership on their platforms, however the details of the platform partnership have yet to be disclosed. A HYBE representative said, “We will work to achieve a practical partnership.”

HYBE also expressed gratitude to all the people who supported the company in its takeover bid for SM.

The HYBE representative said, “I heard that the agreement with Kakao has been explained” to Lee Soo-man, former executive producer of SM.

Kakao also released a statement Sunday and welcomed HYBE’s decision saying, “We respect HYBE’s decision to end its bid.”

The company further said, “As a partner that exchanges positive influences with HYBE and SM Entertainment, we agreed to continue a wide range of partnerships to enhance the global status of K-culture as well as K-pop.” The company also explained that it would continue to acquire additional shares through the tender offer until March 26 as planned since the uncertainty has lifted following HYBE’s decision and said that it would draw up specific plans for the partnership with HYBE and SM.

Kakao repeatedly expressed its intention to manage SM centered on SM 3.0, the future strategy presented by the current management, and to ensure the autonomous and independent operation of SM. The company stressed that it would create new synergy by combining SM’s global IP and production system with Kakao’s IT technology.

Kakao said, “We feel deeply responsible for having caused many people who cherish and love K-culture concern in the process of obtaining shares,” and pledged to smoothly finish the acquisition.

SM also released a statement Sunday and said, “We respect HYBE’s decision to end its takeover bid of SM management.” The company further said, “After the latest agreement, SM will speedily promote the SM 3.0 strategy, which we promised our shareholders, employees, fans and artists,” and stressed, “We will achieve the future vision of becoming a global entertainment company with our fans and shareholders at the center.”