South Korean OTT messaging app in $3 Billion Merger Deal
Published on: 26th May 2014
Note -- this news article is more than a year old.
South Korea's largest OTT messaging app, Kakao has announced a merger with a smaller stock market listed internet company that values the OTT provider at around USD3 billion.
The merger with the smaller Daum Communications enables Kakao to secure a stock market listing without having to file for its own IPO instead.
Subject to the usual regulatory issues, the merged company, to be known as Daum Kakao will see Kakeo own 60% of the enlarged company, with the remaining 40% listed on the local stock exchange.
The Korea Exchange suspended trading in Daum while it verifies if the proposal meets the regulatory conditions for a backdoor listing. The company's shares jumped just ahead of the formal announcement following rumours of a deal.
The deal makes Kakao board Chairman Kim Beom Su a billionaire after he jointly founded the company in 2006.
The transaction will be put to Daum shareholders in August, and if approved the new company should start trading on the stock market in October.