Kakao Entertainment, Melon to merge in September
Kakao Entertainment will merge with music streaming service Melon Company in September, the two companies said Thursday.
The merger was approved by the two companies' boards on Thursday. Both companies are affiliates of Kakao.
The deal will be finalized after approval from shareholders on July 30. The merger will be complete on Sept. 1.
The merger ratio is 1 to 7.8367918 in favor of Melon company, so 7.836791 shares of Kakao Entertainment's common stock will be allocated to one share of Melon Company.
Kakao Entertainment co-CEOs Lee Jin-soo and Kim Sung-soo will maintain their positions. Melon will still be led by Lee Je-wook, who took the helm of the streaming service on July 1.
"The merger will take place in a 'company-in-company' structure, where Melon is run as virtually a separate company within Kakao Entertainment," said a spokesperson from Melon.
"Melon will have a separate CEO and operate under a different system from Kakao Entertainment."
Melon is Korea's biggest online music platform, with 33 million users and 5 million paid users.
Kakao Entertainment is a content production and platform company that services webtoons and web novels on its popular app Kakao Page and also produces films, dramas and music.
The merger came about in an effort to take the lead in the entertainment industry, where "the fiercest competitions are taking place all over the world," according to Kakao Entertainment.
The merger will give Kakao Entertainment the "final piece of the puzzle" in its business, the company said. It already has a strong portfolio across diverse genres of content production and distribution and having a music distribution platform "completes the company's value chain," it said.
After the merger, Kakao Page and Melon will collaborate on special offers for their users to encourage people to join the two services.
"Through this merger, we have established a unique value chain and the potential for growth," Kakao Entertainment said in a statement. "We will endeavor to become a true leading world-class company with our know-how."
BY YOON SO-YEON [firstname.lastname@example.org]