Kakao Founder Kim to Stay On as Major Shareholder After Split

Kakao (035720.KS) has no plan to convert Kakao X into a holding company, said Kim Do-young, chief executive of Kakao Investment and head of group investment strategy at the CA Council.

Kim made the remark on the 21st at a briefing on the spin-offs of Kakao AI and Kakao X, in response to a question about whether Kakao X could become a holding company. Discussions could be held on individual topics, Kim added, but a joint organization like the existing CA Council would no longer be needed.

Kim explained that the current Kakao had needed the CA Council because it combined the role of an operating company running commerce and advertising businesses with the role of managing subsidiaries. After the split, the two companies will establish independent management systems in line with their respective business goals, Kim said.

Cooperation between the KakaoTalk platform and subsidiaries, however, will continue as before. On the role of founder Kim Beom-su, the company said he would continue to support growth and innovation as a major shareholder in both entities.

Kakao held a board meeting the same day and approved the spin-off into Kakao AI, a newly created company, and Kakao X, the surviving company. Based on the book value of net assets, the split ratio is 0.36 for Kakao AI and 0.64 for Kakao X. Existing shareholders will be allotted shares in both companies in proportion to their current holdings.

Each company plans to maintain accountable management and independent governance after the split. Kakao AI will handle the platform business connecting AI with advertising and commerce, centered on KakaoTalk. Kakao X will operate as a future-value investment company overseeing major business segments including techfin, content and mobility, along with new growth businesses.