Kakao Clears First Hurdle in Corporate Spin-Off as Merger Opposition Stays in 2% Range

[Financial News] Kakao's planned corporate spin-off is gaining momentum. Opposition from shareholders to the merger between the surviving entity, Kakao X, and Kakao Investment remained in the 2% range, removing the variable of 20% shareholder opposition. The merger can now proceed through a board resolution without approval from a shareholders' meeting.
According to industry sources on the 22nd, Kakao received shareholder objections to its proposed merger with Kakao Investment, and the final opposition rate was reportedly in the 2% range.
Under the Commercial Act, a small-scale merger requires approval from a shareholders' meeting if at least 20% of the total issued shares oppose it. If opposition remains below 20%, however, the merger can proceed solely through a board resolution.
The Kakao labor union and some minority shareholders, who had opposed the corporate spin-off, encouraged collective action aimed at reaching the 20% opposition threshold to refer the matter to a shareholders' meeting. They failed to meet the threshold.
The absorption merger of the subsidiary is intended to secure resources for Kakao X, which will remain as the surviving entity after the corporate spin-off.
Kim Do-young, nominee chief executive of Kakao X, previously said, "The 2.3 trillion won in cash currently held by Kakao will be transferred to the newly established Kakao AI," adding, "To secure independent investment resources for Kakao X, we will merge and use the cash and investment assets held by Kakao Investment."
If the merger receives board approval, all of Kakao Investment's key assets—including proceeds from the sale of Dunamu, as well as stakes in SK Telecom (SKT) and KADOKAWA—will be transferred to Kakao X. Kakao plans to convene a board meeting in November to make a final decision on the merger between Kakao X and Kakao Investment.

[email protected] Jang Min-kwon Reporter