Seoul/Hong Kong
CNN
 — 

HYBE, the management agency behind superstar boy band BTS, will become the biggest shareholder of its K-pop rival, SM Entertainment.

The South Korean entertainment giants announced the deal Friday, with HYBE set to pick up a 14.8% stake in SM Entertainment for 422.8 billion Korean won ($334.5 million).

SM was founded by legendary music producer Lee Soo-man, who is widely referred to in South Korea as “the godfather of K-pop.” The company is known for representing hit artists, such as NCT 127, EXO, BoA and Girls’ Generation.

News that the two companies were joining forces fired up investors. SM Entertainment’s shares soared 14.1% in Seoul on Friday, while HYBE’s stock jumped 6.4%.

“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,” HYBE said in a statement.

HYBE has been taking steps to expand its global reach. On Thursday, it announced another major deal in the United States, saying it would acquire the owner of Quality Control, a hip-hop label that represents popular artists including Migos and Lil Yachty.