Kakao Page and Kakao M merged, ‘Kakao Entertainment’ launched

[Reporter Shin Young-eun, Daily Economy Star Today]

Kakao Page and Kakao M announced that they had decided to merge the two companies by holding their respective board meetings on the 25th. The merger ratio is 1 to 1.31 for Kakao Page and Kakao M, and 1.31 common shares of Kakao Page are allocated for each common share of Kakao M. The merger ratio, which indicates the value per share, reflects the corporate value of both companies and the number of shares issued, and the corporate values of Kakao Page and Kakao M were set at 1:0.6. The name of the newly merged corporation is ‘Kakao Entertainment’, and the two companies plan to complete the merger on March 1 after holding a general shareholders’ meeting on the 26th and final approval.

This is the first large-scale merger between Kakao subsidiaries, each of which amounts to hundreds of billions of won in sales, and when Kakao Page and Kakao M are combined, annual sales will be expected to reach 1 trillion won. This merger, which is the first in the entertainment industry, is a strategic decision to preoccupy a competitive advantage in the global entertainment industry, which is undergoing fierce battles, such as IT and distribution conglomerates taking the lead as emerging content players. Kakao Page and Kakao M plan to accelerate their global market penetration through the merger between the two companies.

# Completion of IP business capability and platform network to complete a powerful value chain that encompasses all entertainment fields and genres

The merger of Kakao Page and Kakao M is of great significance in that it creates strong synergy based on the IP business capabilities and platform network that both companies have accumulated so far and secures global business competitiveness. Kakao Page, which has established ‘Source Story IP Value Chain’ and ‘Global Story IP Platform Network’, and Kakao M, which has created a ‘content business value chain’ such as music, drama, movies, digital, and performances, is a new merger corporation. Has completed a business portfolio and value chain that can dominate the global market. As a result of the merger of the two companies, there are only 50 persons/affiliates connected, and as well as establishing a strong network with partners in the entertainment and contents industry, from CP (Contents Provider) to secure original story IP, artists such as singers and actors, It has secured a value chain that encompasses all fields of entertainment and all genres, from music, drama, film, and performance planning and production. Based on this, the goal is to continue to pursue bold investments and strategic alliances, and to grow into a leading company with differentiated competitiveness in the global entertainment industry.

Kakao Page has pioneered a new area of Korea’s ‘story entertainment’ by leading the IP business centered on webtoons and web novels. In 2014, the market was paid for through an innovative BM called ‘Free if you wait’, and through continuous investment, it has established a network of 16 subsidiaries and affiliates, establishing itself as the nation’s largest IP company with about 8,500 source story IPs. In addition to the domestic platforms ‘Kakao Page’ and ‘Daum Webtoon’, they have been seeking global advances in 10 countries spanning Japan, North America, China, and Southeast Asia. Kakao Page’s source stories, which are receiving love calls from numerous domestic and international content companies including global OTT, have expanded their IP to various areas such as dramas, movies, and games, and have been recognized for their global competitiveness in Japan and the United States, the world’s largest comic book markets.

Kakao M has 7 leading actors management companies in Korea, 4 labels with various personalities and music colors, as well as a number of drama, film, and performance production companies, and is unrivaled across all platforms from mobile to TV, screen, and live. It has secured the ability to plan and produce music and video contents. Based on Korea’s largest music source investment distribution market share, it releases more than 1,200 titles a year, and it is competitive in the music business by continuously expanding the genre and scope of multi-labels to producers, composers, rappers, as well as singer-songwriters and global idols. Has been strengthened. In addition, it has the ability to plan and produce differentiated video contents through collaboration with partners in the industry, centering on 80 top creators, including writers and directors, and 150 star actors. In addition, by hiring star PDs who have been recognized for their creative planning and directing with their own studio, they opened up a new genre called ‘mobile content’ by showing experimental and novel contents outside the existing frame with the keyword ‘mobile orientation’.

# Focus on planning and production of super IP targeting global, strengthening business competitiveness through content-platform synergy… Secure global growth engine

Based on the IP business know-how and capabilities accumulated by both companies, the new merged corporation will expand content IP and diversify its business across all entertainment fields. While focusing on the production of a powerful super IP targeting the global market, various synergies will be reviewed to secure differentiated content competitiveness.

The platform network that Kakao Page is building at home and abroad and Kakao M’s music and video content will be organically combined to further strengthen the competitiveness of the existing platform and content business. Content planning and production capabilities centered on top creators and Kakao Page’s domestic and overseas platforms optimized for content distribution are added, and it is expected that new and original contents will be introduced. Based on the synergy between the two companies, the pace of global business promotion is also expected to accelerate.

In addition, the synergy between Kakao M CEO Kim Seong-soo and Kakao Page Lee Jin-soo is also raising expectations. CEO Kim Seong-soo, who has led the innovation and globalization of the contents business structure in Korea, and Lee Jin-soo, has led the mobile content industry by leading the innovation of the webtoon “web novel industry, which was not in Korea,” and led a new merged corporation based on their expertise. It plans to make evolution and innovation.

Kakao Page said, “In order to gain competitiveness in the ultra-competitive global entertainment market, we decided to merge Kakao Page and Kakao M. We will lead a new entertainment industry through the combination of the business know-how and capabilities of both companies and the value chain.”

Kakao M said, “By combining content and digital platform, we will secure differentiated competitiveness and accelerate the innovation of content business to grow into a global entertainment company.”


PhotoㅣKakao M

[Ⓒmottokorea All rights reserved]

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