KakaoPay closer to Baro purchaseKakaoPay has received preliminary approval to acquire a controlling stake in Baro Investment & Securities.
The Financial Service Commission (FSC) said Wednesday that the financial technology division of Kakao is eligible to acquire the small brokerage company.
The preliminary approval comes one year and three months after KakaoPay initiated the acquisition of the shares. In Oct. 2018, the company signed off on purchasing 60 percent of shares in Baro Investment, becoming its biggest shareholder, for a reported 40 billion won ($34.2 million). The exact price was not made public.
The fintech firm applied for government review last April, but the process came to a stop when Kakao chairmen Kim Beom-soo went on trial for allegedly violating antitrust laws by not reporting five of subsidiaries to the Fair Trade Commission. Kim was found not guilty in November.
Founded in 2008, Baro Investment & Securities is a small player in the domestic industry and mainly handles fund sales and bond trades for institutional investors.
It reported 63 billion won in operating profit in 2018 and 12 billion won in net profit.
KakaoPay is targeting the securities business in hopes of adding a stock trading option to KakaoTalk, the most popular messenger Korea.
When it signed the contract to acquire Baro, KakaoPay said it would offer financial services on the KakaoTalk platform. It was especially focused on users with small portfolios, such as college students.
KakaoPay was formed in 2017 and reported 30 million accumulated users as of last August. It cleared 20 trillion won in transactions in 2018.
The final decision on the deal will be announced on Feb. 5 at the FSC’s regular meeting.
BY JIN EUN-SOO [firstname.lastname@example.org]