South Korea’s Kakao will hold an emergency town hall meeting called “Open Talk” for employees at 10 a.m. on the 21st to unveil a sweeping corporate governance overhaul centered on converting to a holding company structure and spinning off its core businesses. Unlike the usual practice of announcing schedules days in advance, the notice was issued just one day prior, and the company has decided not to provide online streaming for remote workers — meaning details will only be delivered to those attending in person.

According to multiple sources inside and outside Kakao, the core of the restructuring plan is to convert Kakao into a holding company and separate its largest business, KakaoTalk, into a standalone entity. The structure under discussion includes a holding company tentatively named Kakao Holdings, a KakaoTalk entity to run the messaging business, and Kakao AI Studio, a dedicated artificial intelligence subsidiary. The governance structures of financial affiliates such as KakaoBank and Kakao Pay are also reportedly slated for reorganization.

Spin-Off Seen as Move to Secure AI Investment Capital

The restructuring is being interpreted as an effort to improve business efficiency and enhance governance transparency. In particular, observers suggest the company may be looking to separate business units and attract external investment to secure the massive capital needed to expand its AI operations. Separating major businesses into independent entities could make it relatively easier to raise funds through various means, including equity investments and joint venture formations.

The content division is also reportedly on the chopping block. Plans are being discussed to separate the Melon music platform from Kakao Entertainment and merge it with a business entity under the Kakao holding company, while selling off the story division — which includes webtoons and web novels. The move appears to be aimed at maximizing the “selection and focus” strategy Kakao has long pursued.

Union Prepares Preemptive Response to Potential Split

Crew Union, Kakao’s labor union, has also begun preparing for the possibility of a corporate split. In a notice to members, the union stated, “We anticipate an announcement regarding Kakao’s corporate split,” adding, “We have requested official confirmation from management but have received no response, so we are preparing scenario-based response plans.”

The union plans to hold an Open Talk session for members on the 24th, focusing on entities that could be subject to the split. If additional action is deemed necessary, the union is also considering collective action at Pangyo Station on the 26th. Posts on Blind, an anonymous workplace community, have also surfaced suggesting that Kakao is preparing for a holding company conversion to attract external investment, and that major businesses including KakaoTalk, AI, and Melon could each be separated into subsidiaries.

Separation of Banking and Commerce Rules Pose Key Variable

The key question is the equity structure. As of end-June, founder Kim Beom-su held 13.27% of Kakao shares, while K Cube Holdings — which he wholly owns — held 10.44%. South Korea’s National Pension Service (5.40%) and Maximmo, a subsidiary of China’s Tencent (5.21%), round out the major shareholders.

In the holding company conversion process, South Korea’s separation of banking and commerce regulations — which require financial capital and industrial capital to be kept separate — are expected to be a key variable. Untangling the governance structure involving K Cube Holdings and other financial affiliates will require equity restructuring. As a result, some observers note that the final plan could remain fluid.

Kakao has not disclosed specific agenda items and has yet to officially announce any restructuring measures, including a corporate split or holding company conversion.