Kakao to spin off chat platform business to tackle conglomerate discount
South Korea's Kakao Corp is splitting its chat platform and investment businesses into two separate listed entities by 2027, a restructuring aimed at eliminating its conglomerate discount and sharpening its focus on artificial intelligence.
South Korea’s Kakao Corp will divide its operations into two distinct entities, spinning off its chat app-based platform business into a new company tentatively named KakaoAI. The remaining investment operations will be housed in a renamed holding company called KakaoX, the company announced in a regulatory filing on Friday.
The corporate split is scheduled to take effect on January 1, with KakaoAI expected to make its debut on the Korea Exchange shortly after on January 27, 2027. This dual-listing structure is designed to sharpen business specialisation and directly address the persistent conglomerate discount. For investors, such discounts often occur when complex corporate structures obscure the true value of individual business units, making a pure-play relisting a strategic move to unlock hidden shareholder value.
Under the new structure, KakaoAI will concentrate on the KakaoTalk messaging ecosystem alongside artificial intelligence, advertising, and commerce. Meanwhile, KakaoX will function as an investment manager, developing holdings across fintech, digital content, and mobility sectors.
The company has outlined ambitious financial targets for the newly independent entities by the end of the decade. KakaoAI is aiming for at least 6 trillion won, or roughly $4.34 billion, in annual revenue with an operating margin exceeding 30 per cent. KakaoX is targeting a larger revenue base of at least 10 trillion won by 2030.
These 2030 projections represent substantial growth from the group's consolidated revenue baseline of 8.1 trillion won recorded in 2025. Separating the tech and AI assets from the broader investment portfolio should provide the market with clearer metrics to evaluate each division's performance.
To further incentivise investors and support the share price during the transition, Kakao has committed to returning capital. The company pledged 300 billion won in share buybacks and cancellations to be executed over the three years following the corporate split.
