Kakao Denies Transition to Holding Company for Kakao X... Pursuing Independent Management for AI and Investment

Kakao is set to split into Kakao X and Kakao AI through a corporate demerger to separate investment and business functions, aiming to resolve the undervaluation of its corporate value stemming from its conglomerate structure.

Kakao X will focus on tech-fin, content, mobility, and future investments, while Kakao AI will concentrate on KakaoTalk-based advertising, commerce, and artificial intelligence (AI) businesses.

Kakao has drawn a line against possibilities raised by some in the market regarding the transition of Kakao X into a holding company, and plans to establish independent management systems for both companies without group joint organizations like the existing CA Council after the split.

Kim Do-young, CEO of Kakao Investment and head of the Group Investment Strategy Office at the CA Council, stated during a Q&A session at a press conference on Kakao's corporate demerger held today (August 21) in response to a question about whether there are plans to turn investment-specialized company Kakao X into a holding company, "There are no plans whatsoever to convert Kakao X into a holding company."

Regarding the restructuring of corporate structure and changes in group governance, CEO Kim said, "While we can discuss matters by topic, joint organizations like the existing CA Council are no longer necessary."

He explained, "Before the demerger, Kakao simultaneously performed the roles of a business company carrying out commerce and advertising businesses based on Kakao Talk biz and managing subsidiaries, which is why the CA Council for independent subsidiary operation existed. Once the demerger takes place, since the business objectives of the two companies are different, they will operate independently."

He added, "Even after the demerger, each company plans to maintain responsible management and independent governance just as it does now, but organic collaboration between the Kakao Talk platform and subsidiaries will proceed the same as before."

Through this structural reorganization, the surviving entity Kakao X will be transformed into a future-value investment company that supports the growth of three core business groups—tech-fin, content, and mobility—and exclusively handles investments in innovative companies.

The newly established entity Kakao AI will be launched as an AI core company combining Kakao Talk at its center with advertising, commerce, and agentic AI based on the context of 50 million users.

Based on an investment financial resource of 2.3 trillion won, Kakao AI plans to build AI services with a low-cost, high-efficiency structure that reduces inference costs by up to 90%, aiming for 6 trillion won in sales and over 20 million daily active users by 2030.

Emphasizing plans to address corporate undervaluation and enhance shareholder value, CEO Kim stressed, "We will resolve the conglomerate discount, which is undervalued by more than 50% compared to a combined value of 34.2 trillion won against a market capitalization of 16.8 trillion won."

Pointing out past inefficiencies in decision-making, he said, "In the meantime, 85% of board agenda items were concentrated on managing subsidiaries, which hindered the growth of the main body. Through this demerger, we will realize optimized resource allocation by business area and prompt decision-making."

Regarding the protection of shareholder rights and interests, he conveyed that the company has adopted a demerger method to maintain identical ownership stakes for controlling and minority shareholders, and will strictly comply with guidelines to prevent duplicate listing.

Regarding the role of founder Kim Beom-su, CEO Kim said, "I believe the founder will continue to fulfill his role as a controlling shareholder in both legal entities, and will take on the role of supporting growth and innovation just as he has until now."

Meanwhile, Kakao resolved through its board of directors today on a demerger ratio of 0.64 for Kakao X and 0.36 for Kakao AI based on net asset book value.

Kakao plans to complete the demerger on January 1 next year following approval at an extraordinary general meeting of shareholders on December 17, and list them on the stock market as Kakao X (changed listing) and Kakao AI (re-listing) on January 27 after a period of stock trading suspension.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.