A&E Television Networks LLC, a subsidiary of Walt Disney Company, is expected to invest $15 million in iHQ Inc., a South Korean entertainment management firm, in a move to tap further into Korea’s growing entertaining contents market. The investment is also expected to allow iHQ to accelerate efforts to expand its presence in the global content market.

According to multiple sources from the investment bank industry on Monday, Kospi-listed iHQ and A&E Television Networks have agreed to set up a strategic partnership and under the deal, the U.S. company will invest about $15 million to buy around 5 percent of a 50.37 percent stake in iHQ held by its largest shareholder D’Live Co., the biggest cable TV service provider in Seoul. The two companies that are currently in last-minute talks to fine-tune partnership terms are projected to complete the deal by early next month at the earliest, according to sources.

The upcoming deal is expected to enable the global media giant Walt Disney to utilize various Korean contents including popular Korean dramas produced by iHQ and secure D’Live, a large contents retail platform in the country. A&E Television Networks that owns cable channels dedicated to documentaries and drama series has been broadcasting its History Channel in Korea. The partnership with A&E Television Networks is also expected to pave the way for iHQ to enter the global entertainment content market.

D’Live, iHQ’s mother company, will also likely benefit from the upcoming investment into its core unit iHQ that is expected to help improve D’Live’s overall corporate value. Management control of D’Live was recently turned over to its creditors including Shinhan Bank after Korea’s largest private equity fund MBK Partners, Macquarie Group and Mirae Asset Financial Group that together purchased the cable TV provider in 2007 failed to reschedule maturing debts. D’Live as other Korean cable TV operators has been struggling amid intensifying competition from new media such as the Internet Protocol Television (IPTV) services.

iHQ stocks jumped 6.7 percent, or 145 won, from a previous session to end at 2,315 won on Monday.

By Kang Doo-soon, Han Woo-ram

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