Tencent Music Buys SM Entertainment Stake in K-Pop Bet (1)

A Tencent Holdings Ltd. subsidiary is snapping up a nearly 10% stake in SM Entertainment Co. Ltd. valued at about $180 million, marking a rare Chinese investment into a South Korean company in recent years.

Tencent Music Entertainment Group, which is controlled by Tencent, will buy the stake from BTS-agency Hybe Co Ltd., which is selling its remaining 2.2 million shares in SM Entertainment at 110,000 won each, a 15.3% discount to Tuesday’s close, according to a regulatory filing.

The move comes as China is widely expected to lift its nearly decade old unofficial ban on ...