Genie Music Corporation (KOSDAQ:A043610) signed an agreement to acquire CJ Digital Music Corporation from CJ ENM CO., Ltd. (KOSDAQ:A035760) for KRW 57.5 billion on July 25, 2018. The consideration will be paid through issuance of 8.9 million shares of Genie Music Corporation in an exchange ratio of 1: 5.5766783. The new shares issued will be listed on November 2, 2018.

CJ Digital Music Corporation will be dissolved upon completion. As of December 31, 2017, CJ Digital Music Corporation reported total assets of KRW 69.6 billion. For the year ended December 31, 2017, CJ Digital Music Corporation reported total sales of KRW 81.3 billion and net loss of KRW 2.6 billion.

The transaction is subject to approval of shareholders of Genie Music Corporation and CJ Digital Music Corporation. The Board of Directors of Genie Music Corporation passed a resolution on the transaction on July 25, 2018. As on September 4, 2018, the transaction is approved by the shareholders of Genie Music Corporation.

The transaction is expected to close on October 10, 2018. Ernst & Young Han Young acted as external rating institution.