SEOUL, KOREA - Daum Communications and Kakao announced that the two companies have agreed to merge as a joint corporation, Daum Kakao.
The companies agreed to the deal on May 23, and aim to close the deal within August 2014, pending shareholder approval.
The leaders of the two companies, Daum CEO Sae-Hoon Choi and Kakao co-CEO Sirgoo Lee, have explained their mutual desire to integrate their core capabilities and build a platform offering global communications, lifestyle services and content to maximize competitiveness in a rapidly evolving global market.
“Both companies have unique strengths that complement each other while sharing common values championing collaboration, openness and a strong belief in a non-hierarchical work culture,” said Choi. “We believe that Kakao’s strong market position in the mobile sphere paired with our excellent content service and 20 years of operating experience will yield powerful corporate synergy.”
“We share a strong drive to adapt to the rapidly changing global market by integrating the core abilities of both companies,” said Sirgoo Lee of Kakao. “The joint corporation will grow as a business centered on communications, lifestyle and content bridging mobile and web.”
Kakao shareholders are to receive approximately 1.556 newly issued Daum Kakao shares in exchange for each Kakao share held.
Daum Kakao will establish a strong foothold in the mobile industry based on the combination of Kakao’s expansive mobile platform and Daum’s diverse web marketing solutions. The strengths of the combined entity's web and mobile businesses position them to become a global leader in communications services.
Daum and Kakao will remain independent entities in the short term and are planning to gradually integrate divisions of each respective company. Due to common shared values of the two companies such as open communication, collaboration and horizontal work cultures, the merger is expected to be an advantageous union. The combined company is expected to have 3,200 employees: 2,600 from Daum and 600 from Kakao.
Daum was established in 1995 at the advent of the Internet and has established strong web trends such as Hanmail, web communities known as ‘Daum Café,’ Media Daum and search engine services. They have expanded their services from PC into areas such as mobile and Digital View, responding to the changing market. They were the first search engine to provide a service optimized for mobile.
Since the launch of its app in 2010, Kakao has solidified its position as a leader in the mobile industry, expanding its service beyond messaging to a social platform encompassing games, digital content, marketing, commerce and more. Its flagship application is KakaoTalk, both a mobile messenger and mobile platform.