Kakao seeks to ease investor concerns over planned split

Kakao said Friday that Kakao X, the investment company to emerge from its planned corporate split, will not become a holding company.

“There are absolutely no plans to convert Kakao X into a holding company after the split,” Kim Do-young, CEO nominee for Kakao X, said at a briefing.

The clarification addresses a central question surrounding the restructuring. Kakao X will retain stakes in major affiliates and manage the group’s investment portfolio, giving it some characteristics of a holding company even without formal designation.

Kakao’s board earlier Friday approved a plan to divide the company into two listed entities: Kakao AI, a newly established operating company, and Kakao X, the surviving investment company.

The split ratio was set at 0.36 for Kakao AI and 0.64 for Kakao X, based on their respective net asset book values. Existing shareholders will receive shares in both companies according to the ratio.

Kakao AI will house KakaoTalk and the group’s artificial intelligence, advertising and commerce businesses. Kakao X will oversee affiliate stakes, portfolio management and investments.

Kim said the restructuring is intended to separate Kakao’s operating businesses from its investment functions and allow the two companies to pursue different objectives under independent management.

Business cooperation between KakaoTalk and Kakao affiliates will continue after the split, Kim added.

Kakao AI aims to generate more than 6 trillion won ($4.3 billion) in annual revenue by 2030, including at least 1 trillion won from AI-related businesses.

By transferring affiliate management to Kakao X, the operating company plans to focus its resources on KakaoTalk, AI, advertising and commerce while developing new revenue sources.

Chung Shin-a, CEO nominee for Kakao AI, said the company is targeting annual revenue growth of about 20 percent through 2030.

Kakao founder Kim Beom-su is expected to remain a major shareholder of both companies, which will maintain separate governance and management structures.

Kakao plans to seek shareholder approval at an extraordinary general meeting Dec. 17 and complete the split Jan. 1, 2027. Kakao X is scheduled to resume trading through a change listing, while Kakao AI is set to be relisted Jan. 27.