Korea’s number one mobile communication platform Kakao and major portal site Daum are going to come together. The joint corporation would be called ‘Daum Kakao’.
Daum announced the merger on the 26th of May. Both companies held a board of directors to agree the merger and are going to complete it at a general meeting of stockholders by 27th of August. If it goes well, Kakao’s 1.556 share becomes Daum’s 1 share and ‘Daum Kakao’ will be founded on October 1.
Though Daum seemingly merges Kakao, what we need to recognize of it here is that Kakao’s back-door listing. While Kakao is a unlisted corporation for now, Kakao is easily able to be listed on KOSDAQ without any screening under the name of Daum Kakao thanks to the merger.
Both companies said the merger is to maximize their competitiveness in the shifting global market. “Internet business growth can be acquired by taking advantage of Kakao’s mobile traffic while Daum’s technology, content, and platforms can accelerate Kakao’s mobile information and life revolution,” said Daum. “In spite of the merger, everything will remain the same. Daum Mobage and Daum Game which is going to be separated this July also remain intact.”
The merger is expected to be on a scale of $697M of annual sales, $144M of business profit, and $130M of cashable asset on 2013 financial statements basis.