Kakao clears first hurdle for spin-off into AI and investment entities

Kakao has cleared a major hurdle in its plan to undergo a spin-off scheduled for completion in January next year. The company reported that shareholder opposition to the merger between the surviving entity, Kakao X, and its investment subsidiary, Kakao Investment, reached only approximately 2%.

Under current commercial law, a small-scale merger can be approved by the board of directors alone if opposition from shareholders holding more than 20% of total issued shares is not met. Despite efforts by the Kakao labor union and individual shareholders to reach this threshold to force a general shareholder meeting, the low opposition rate allows the process to proceed as planned.

Upon completion of the merger, Kakao Investment’s assets—including cash from the sale of Dunamu and stakes in SK Telecom and Kadokawa, totaling approximately 2.3 trillion won—will be absorbed by Kakao X. This move is intended to provide investment resources for the newly formed Kakao AI, which will focus on artificial intelligence services.

Kakao plans to hold a board meeting on November 6 to finalize the merger approval, followed by an extraordinary general meeting on December 17. The spin-off is expected to be finalized on January 1, with the relisting of Kakao AI and the change in listing for Kakao X scheduled for January 27.