HYBE, the label behind renowned K-pop group BTS, became its rival SM Entertainment's largest shareholder. The deal solidifies HYBE's position as the dominant force in South Korea's music business, where it is already the leading player, while it also strives to grow internationally.

The agreement was revealed on Friday, with HYBE acquiring a 14.8% interest in SM Entertainment for 422.8 billion Korean won ($334.5 million).

SM was established by famed music producer Lee Soo-man, dubbed "the godfather of K-pop" in South Korea. NCT 127, EXO, BoA, and Girls' Generation are among the hit acts represented by the agency.

Investors were thrilled to hear that the two firms were joining forces. On Friday, SM Entertainment's stock rose 16% in Seoul. HYBE's shares surged 3% at first before falling 1.5% to close down 1.5%.

HYBE also manages well-known acts such as NewJeans, Tomorrow x Together, and Seventeen in addition to BTS.

"This acquisition represents a major step by HYBE to integrate the global expertise of both companies to become a game changer in the global music industry," the company said in a statement.

HYBE has been striving to broaden its worldwide reach. It announced another significant purchase in the United States on Thursday, saying it will acquire the owner of Quality Control, a hip-hop label that handles prominent artists such as Migos and Lil Yachty.

According to Sunhwa Lee, an internet and entertainment analyst at KB Securities, this transaction would help HYBE establish a bigger position in the US music business. She stated in a report on Thursday that the company's bigger goals were to "go beyond the boundaries of K-pop and develop new global artists across various genres."