Kakao: "No Plans for Holding Company Transition... Founder Brian Kim to Remain Largest Shareholder"

"Independent Management for Both Companies After Spin-Off... Collaboration to Continue as Before"

"No Additional Plans for Governance Restructuring Such as Mergers"

"Enhancing Corporate and Shareholder Value Through Swift Decision-Making"

As Kakao embarks on its largest corporate restructuring since its founding, driven by the age of artificial intelligence (AI) through a spin-off, the company has dismissed speculation about transitioning to a holding company structure. Founder Brian Kim will also maintain his role as the largest shareholder. Through this spin-off, Kakao aims to enhance its undervalued corporate value and accelerate its AI business initiatives.

During the Kakao AI·Kakao X spin-off briefing held on the afternoon of August 21, Do-Young Kim, CEO of Kakao Investment and Head of Group Investment Strategy at the CA Council, stated, "There are absolutely no plans to convert Kakao X into a holding company."

Kakao Pangyo Agit in Seongnam, Gyeonggi Province. Photo by Jinhyung Kang aymsdream@

Regarding the management of the two companies after the spin-off, he said, "Since the business purposes of both companies are different, they will operate independently." However, he added, "The organic collaboration between the KakaoTalk platform and its subsidiaries will continue as before."

The role of founder Brian Kim will also remain unchanged. Kim explained, "The founder's role as the largest shareholder will be maintained for both entities," adding, "He will continue to support growth and innovation just as he has until now." Currently, founder Brian Kim serves as Head of the Future Initiative Center at Kakao. Kim elaborated that after the spin-off, shareholdings would be distributed equally, ensuring that the founder and his holding company, K Cube Holdings, maintain their current levels of ownership.

With the spin-off, the CA Council, which previously functioned as Kakao Group's highest decision-making body, will be dismantled. Kim said, "There may be topic-specific discussions, but a joint organization like the existing CA Council is no longer needed," explaining, "Prior to the spin-off, Kakao simultaneously operated as a business company focusing on KakaoTalk-based commerce and advertising, as well as managing its subsidiaries; thus, the CA Council existed to coordinate independent subsidiary management."

He also clarified that there are currently no additional plans for governance restructuring. Kim stated, "Regarding further governance reforms such as mergers, there are no specific issues being considered at this time," and emphasized, "Even when investing in new growth drivers in the future, we will comply with procedures and regulations according to the dual listing guidelines."

"The Core Is Structural Separation Between the AI Business Company and the Investment Company"

On the criteria for dividing Kakao affiliates into Kakao X and Kakao AI, Kim said, "The core is the structural separation between the AI business company and the investment company." He explained, "Kakao AI will operate as a business company focused on KakaoTalk and AI technology, owning subsidiaries that support infrastructure services. Kakao X will operate as an investment and portfolio management company, supporting and investing by holding equity in all group affiliates."

Kim cited the reasoning behind the spin-off decision as follows: "In the process of preparing to secure competitiveness in the AI era, there were concerns that failing to act swiftly now would mean missing a critical timing to become a leader in B2C AI services."

With this split, Kakao is also seeking to enhance its undervalued corporate and shareholder value. Kim emphasized, "Our combined value is KRW 34.2 trillion, yet our market capitalization is significantly undervalued at KRW 16.8 trillion—less than 50%. We intend to resolve the conglomerate discount." He continued, "Previously, 85% of board agenda items were focused on managing subsidiaries, hampering growth of the core company. Through this spin-off, we will achieve optimal resource allocation and rapid decision-making according to each business segment."

Earlier in the day, Kakao's board of directors resolved to implement the spin-off, creating Kakao AI (the new entity) and Kakao X (the surviving entity). Kakao AI will oversee KakaoTalk, AI, advertising, and commerce, while Kakao X will support and manage subsidiary growth. Kakao AI will be led by Kakao CEO Jin-Sinah Jung, and Kakao X by Do-Young Kim, CEO of Kakao Investment.

The division ratio between the two entities will be based on book value of net assets: 0.36 for Kakao AI and 0.64 for Kakao X. Existing shareholders will be allocated shares in both companies in accordance with this ratio. Kakao plans to hold an extraordinary shareholders' meeting on December 17, finalize the split on January 1 of the following year, and pursue Kakao AI's relisting as well as Kakao X's revised listing on January 27 that same month.

This content was produced with the assistance of AI translation services.