Kakao corporate restructuring and spin-off

Kakao Corp has approved a corporate restructuring plan to split into two separate listed entities: KakaoAI and KakaoX. The demerger aims to increase business specialization, enable independent management, and address valuation gaps between the group’s estimated potential value and its market capitalization.

KakaoAI will focus on the KakaoTalk messenger platform, integrating artificial intelligence, advertising, and commerce. KakaoX will serve as the surviving entity, managing investment-focused sectors including fintech, content, and mobility businesses such as Kakao Bank, Kakao Pay, and Kakao Mobility.

Existing shareholders will receive shares in both companies based on a split ratio of 0.36 for KakaoAI and 0.64 for KakaoX. To support shareholders, Kakao announced a 300 billion won treasury stock buyback and cancellation plan. KakaoAI also intends to use 20% to 35% of its adjusted free cash flow for shareholder returns between 2027 and 2029, while KakaoX plans to utilize a portion of dividends from subsidiaries and investment gains for returns.

Following the announcement, Kakao’s stock price fell 7.49% to close at 35,800 won. The company expects to complete the split by January 1, 2027, with relisting on the Korea Exchange scheduled for late January 2027.