Kakao Labor Union Launches Campaign Against Spin-Off, Plans Joint Action With Minority Shareholders

Union Demands Explanation on Spin-Off and Assurance of Job Security from Management

The Kakao labor union is launching a campaign against management’s planned spin-off. The union is demanding detailed explanations from the company regarding the spin-off, while also exploring ways to jointly respond to the merger with minority shareholders.

The Chemical, Textile, and Food Industry Labor Union Kakao Branch (Kakao Branch) announced on the 11th, "We will ask members and minority shareholders to express their opposition to the small-scale merger between Kakao and Kakao Investment." In addition, the union said it would consider solidarity and joint action with minority shareholders depending on the company’s subsequent explanations and negotiations.

At the 'Kakao Bank Strike Battle Resolution Rally and Kakao Split Opposition Joint Bargaining Declaration Ceremony' held on the 26th at Pangyo Station Plaza in Bundang-gu, Seongnam-si, Gyeonggi-do, union members of the Kakao Branch of the National Chemical Fiber Food Industry Labor Union are shouting slogans. Photo by Yonhap News Agency

Previously, Kakao announced a plan to implement a spin-off, dividing the company into 'KakaoAI', responsible for artificial intelligence (AI), platforms, advertising, and other functions, and 'KakaoX', which would be in charge of subsidiary management and investment. However, according to the union, management has not provided a detailed explanation of this spin-off, and is moving forward without measures to protect the rights of workers and shareholders.

The Kakao Branch demanded that management provide: ▲ a specific explanation about the necessity and effect of the spin-off ▲ written guarantees for employment and working conditions ▲ disclosure of personnel allocation standards and objection procedures ▲ prior consultation with the labor union in case of organizational restructuring, business transfer, or sale ▲ and transparent disclosure about the value of the spin-off and any subsequent transactions.

The union also called for sufficient public disclosure of information to minority shareholders. Even if shares in the new entity are allocated proportionally to existing shareholders, the risk of shareholder value being damaged through additional listings, capital increases, affiliated-company transactions, or business restructuring after the split remains. The Kakao Branch stressed that the basis for spin-off valuation and follow-up business restructuring directions should be made public, enabling general shareholders to assess the rationale for the split.

Meanwhile, Kakao is moving forward with a small-scale merger to absorb Kakao Investment. The merger is scheduled to take effect on January 1, 2027, with KakaoX as the surviving company. However, if shareholders holding 20% or more of total issued shares express opposition during the designated period, the merger cannot proceed as a small-scale merger in which board approval substitutes for shareholder approval.

Beneficial shareholders holding shares through securities firms can submit their opposition via the respective brokerage. The union is also considering ways to gather opinions and act jointly with minority shareholders, and is encouraging union members to formally express their opposition for any shares they hold.

Seo Seungwook, head of the Kakao Branch, stated, “The labor union is not denying the company’s management authority itself, but emphasizes that workers’ rights must not be infringed in the decision-making process, and shareholders must also be able to make decisions based on adequate information.” He added, “The company must first answer why this spin-off is necessary now, and how it will protect workers’ employment and the value of minority shareholders.”

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