South Korea’s Kakao is launching Kakao Entertainment after merging two of its subsidiaries
Kakao is mainly known for its instant messaging app Kakaotalk and other technology. Now, it is venturing into another lucrative business, which is the entertainment industry.
The company is set to launch its Kakao Entertainment division after merging two of its leading subsidiaries Kakao Page, and Kakao M. Kakao announced the merger on Jan. 25 and revealed that things have been ironed out, and the newly-formed entity will now be called Kakao Entertainment.
The consolidation of two successful companies
As per The Korea Herald, The consolidated companies were scheduled to hold their general shareholders' meeting on January 26. The board will give their final approval and seal the deal at this meeting then the merger is expected to be fully completed on March 1.
This is one of the biggest reorganization within a company in this time of the pandemic. Binding Kakao Page, the popular mobile-based web comic platform, and Kakao M, an entertainment firm, is predicted to create an all-around company that will be able to offer a broader form of entertainment.
Kakao Page is a home of over 8,000 original web comic stories that Kakao Entertainment can use to produce dramas and mini-series. What’s more, Kakao M also has record labels and talent agencies, so they can venture into almost anything in a full-scale entertainment company environment.
Kakao is also operating in Japan, and it is planning to go global by opening an office in North America, Southeast Asia, and China. The parent company, Kakao, estimated that with Kakao Entertainment, they could generate an annual profit of over KRW1 trillion or around $906 million.
The main goal for the merger
Finally, the decision to merge Kakao M and Kakao Page was decided by the board. Apart from the boost in income, Kakao has other goals for consolidating two of its subsidiaries.
“The merger of Kakao Page and Kakao M is expected to create a robust synergy effect given the respective companies' capabilities in the content business and digital platforms and set the ground for KAKAO ENTERTAINMENT's next stage of growth through global expansion,” the company stated via press release.