Kakao has big plans for SM, promises 'amicable' acquisition

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Kakao has big plans for SM, promises 'amicable' acquisition

Kakao CEO Hong Eun-taek [NEWS1]

Kakao CEO Hong Eun-taek [NEWS1]

 
Kakao aims to leverage its tech expertise to jump on the K-pop "IP" bandwagon as it is now the largest shareholder of the showbiz agency behind NCT and aespa. 

 
"The two parties will develop synergy by combining IT from Kakao and Kakao Entertainment and global intellectual property from SM Entertainment," Kakao CEO Hong Eun-taek said Tuesday. 
 
Kakao added music and content production to its agenda-item discussions during the general shareholder meeting held at the company's Jeju headquarters. 
 
Hong promised to complete the acquisition of SM “quickly and amicably.” According to Kakao, SM Entertainment will be a consolidated subsidiary.
 
Kakao succeeded in acquiring a total of 39.87 percent of SM Entertainment in its tender offer for shares at 150,000 won ($115.52) apiece to become the largest shareholder of the K-pop powerhouse. 
 
Kakao has 20.76 percent of the company and Kakao Entertainment 19.11 percent, according to the public disclosure Tuesday. 
 
Hong also touched on a plan to transform the messenger service into a social media platform. Changes have been ongoing since last December.  
 
The company plans to create a separate tab for its “open chat” service by first half of this year. The open chatrooms currently available are where users can create and participate in a chatroom anonymously. The current messenger app format is based on acquaintance-based chatrooms. 
 
“From chatrooms where users can share daily entertainment to big-scale events run by corporations, we plan to expand the usage of this communicative service so that users can immerse themselves in a variety of topics and themes.”
 
In an effort to create new revenue streams, Kakao will introduce a new healthcare service where Kakao users can monitor health records in real time by bringing clinical trial results and medical records from hospitals. Whether the service will be brought into the messenger app or be a separate service has not been decided yet.
 
In response to the wild popularity of ChatGPT, Kakao will roll out its own generative AI chatbot specializing in Korean language.  
 
“Instead of competing on the level of global companies in AI, we will focus on a ‘vertical’ AI service using Korean-language AI model ‘Ko-GPT’ developed by our AI research subsidiary KakaoBrain,” Hong said. 
 
For dividend payouts, the company plans to pay a total of 26.2 billion won, a 14 percent increase on year, and cancel 1.9 million shares, which is 0.43 percent of the shares outstanding.
 
The full-year 2022 dividend will be 60 won per share, up from 50 won.  
 

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]
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