South Korea’s largest mobile messaging service, Kakao Corp., is merging with Daum, a smaller listed internet portal, as per The Wall Street Journal report. The deal amount is more than USD 2.9 billion and is an all stock deal.
As a part of the deal, the merged company, will issue the shares in which Kakao shareholders will receive 1.5 shares and Daum shareholders will receive shares at a ratio of 1:1.
The new company will be listed in October and will be called Daum Kakao. “It will offer services in sectors like information and daily life, communications etc.,” said Sirgoo Lee, Kakao’s chief executive.
Kakao was also planning to go public before 2015 at a valuation of USD 2 billion, but, will now shun those plans.
Kakao was launched in 2010 by Founder & Chairman Beom-Su Kim. It is known for its smartphone messenger app which allows users to send and receive messages to international correspondents. The company also offers a platform of mobile services that make lives richer and more social as well as provides free in-app texting and voice calls. It has recently raised three round of investments and secured a total funding of USD 92.10 million.
The company claims to have 140 million registered users worldwide, including 93% of the smartphone user in South Korea. Instead, Kakao Talk has watched WeChat in which it having 390 million users in China along with rivals Line, including 400 million registered users in Japan.
“We can secure growth of our internet business by taking advantage of Kakao’s mobile traffic while Kakao can also strengthen its mobile service with Daum’s specialised workforce, technology, content and platform,” as said in Daum’s company statement.
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