Korean messaging services provider Kakao has agreed to merge with internet portal Daum Communications in an all-stock deal that values the messaging app operator at more than KRW 3 trillion (USD 2.9 billion). Under the deal, privately-held Kakao has dropped plans to list its shares in Seoul early next year. The tie-up will help both companies better compete with Naver, the country’s biggest internet portal operator, which also owns rival mobile messaging app Line, the Financial Times reports.
Daum, the country’s second-largest internet portal, will issue 43 million new shares to Kakao stockholders, including 33 million common shares. Kakao stockholders will receive about 1.5 shares in the merged company for every Kakao share that they own, while Daum stockholders receive new shares of the merged company at a ratio of 1:1. The new company will be called Daum Kakao and will be listed in October, pending shareholder approval.
Daum expects to grow its business by taking advantage of Kakao's mobile platform, while its workforce, technology, content and platform will help Kakao develop further. KakaoTalk has about 145 million users in Asia, and its app is installed on more than nine in 10 smartphones in Korea.
