Kakao (035720.KS) is carrying out the largest restructuring of its corporate governance since its founding, aiming to strengthen its artificial intelligence capabilities and win a higher valuation.
Kakao's board approved a plan on the 21st to split the company into Kakao AI, a newly established entity, and Kakao X, the surviving entity, the company said.
Kakao AI is designed to grow into an "AI core company" that links AI, advertising and commerce around KakaoTalk to create a distinctive user experience and revenue model. Chung Shin-a, Kakao's current CEO, will lead the new company.
Kakao X will launch as a "future-value investment company" encompassing key affiliates including KakaoBank, Kakao Entertainment and Kakao Mobility. It will also work to secure growth momentum by finding new businesses and investing in innovative firms, drawing on 6.4 trillion won ($4.6 billion) raised through measures such as monetizing its assets. Kim Do-young, chief executive of Kakao Investment and head of the group investment strategy office at the CA Council, has been named to lead the company.
The split ratio, based on net asset book value, is 0.36 for Kakao AI and 0.64 for Kakao X. Existing shareholders will receive shares in both companies in line with their current holdings.
Kakao plans to complete the split on January 1, 2027, following an extraordinary shareholders' meeting on December 17 this year, and will pursue the relisting of Kakao AI and the changed listing of Kakao X on January 27, 2027.
"In the mobile era, Kakao was the first to jump onto untrodden paths, creating innovation and changing users' daily lives," said Kim Beom-su, Kakao's founder. "Because the AI era demands a different order of agility, we will redesign our growth structure around two engines, Kakao AI and Kakao X, and I will do my part so that the results return to shareholders, users and employees alike."
