Kakao Corp. (KOSE:A035720) has emerged as a strong candidate to acquire SM Entertainment Co., Ltd. (KOSDAQ:A041510), as it hopes to utilize the talent agency's intellectual property to compete with its platform rival Naver, according to industry officials, Tuesday (March 22, 2022). CJ ENM entered talks in 2021 with SM Entertainment to take over the talent agency.

However, they did not find common ground in fixing the sell-off price and Kakao ended up taking CJ ENM's place, according to officials. Kakao previously acquired EDAM Entertainment and Antenna Music to boost its entertainment business. However, it learned that they are not enough to compete against Naver, which has formed business partnerships with HYBE and CJ ENM.

HYBE is home to globally successful K-pop band BTS. Both Kakao and SM Entertainment said it is true that the two companies are in talks over a business partnership and investment in shares, but stressed nothing has been decided. "We are reviewing various ways to collaborate with SM Entertainment, but no specific details have been confirmed," a Kakao official said.

Currently, the sell-off price for SM Entertainment is estimated at between KRW 600 billion ($491.2 million) and KRW 1 trillion .