Kakao’s office building in Pangyo, Seongnam, Gyeonggi Province. News1
Kakao (035720.KS), which has split into two independent entities through a spin-off, has officially dismissed market speculation that KakaoX would be converted into a holding company.
Kim Do-young, head of Kakao Investment and group investment strategy chief at Kakao’s CA Council, who has been named to lead KakaoX, the arm overseeing the group’s investment operations, said at a press briefing on the 21st that there is no plan to turn KakaoX into a holding company.
Kim said a joint organization like the existing CA Council is no longer necessary. Before the corporate split, Kakao simultaneously served as an operating company running commerce and advertising businesses based on TalkBiz and as a holding-type entity managing its subsidiaries, which is why the CA Council was needed to coordinate the operations of independent subsidiaries, Kim explained.
Because the two companies now have clearly different business purposes following the spin-off, KakaoX and KakaoAI will be managed entirely independently, Kim stressed, adding that organic business collaboration between the KakaoTalk platform and subsidiaries will continue unchanged.
On why an independent split was chosen instead of a holding company conversion, Kim said it was a conclusion reached while reviewing Kakao’s future growth strategy and a business structure optimized for the AI era. After in-depth discussions since early this year, the company judged that the current structure was most suitable for long-term growth and enhancing corporate value, Kim explained.
Regarding the future status and role of founder Kim Beom-su, Kim said the founder would continue to support growth and innovation as founder and largest shareholder in both entities, just as before, adding that each entity plans to pursue accountable management based on independent governance structures after the split.
Because share ratios are inherited identically before and after a spin-off, the founder’s personal stake and his Kcube Holdings stake will also be allocated at the same ratio, leaving ownership ratios unchanged, Kim added.
On concerns that KakaoAI suffered a loss because the spin-off ratio was set based on net asset book value, Kim said no loss to shareholder value would occur as long as the share ratio is maintained, because the entities will be valued separately by the market at the time of listing after the split is completed. Given KakaoAI’s growth plans, investors will value KakaoX highly at the point the split is completed, taking into account business stability and diverse growth opportunities, Kim said.