Three Companies Spin Off in a Week, Why?

KakaoX will become a subsidiary management and holding company-type entity, while KakaoAI will focus on KakaoTalk-based AI businesses.

“It feels like a holding company, but it's not legally a holding company; it's a company that feels like one,” explained Shim Jae-seok.

This ensures that existing KakaoX shareholders also hold all shares of the new KakaoAI, avoiding disputes over shareholder value erosion that can occur with a physical division.

Shim Jae-seok stated, “Existing shareholders of the original company enter the new company with the exact same shareholder composition.”

This outcome shows a smaller allocation for the KakaoTalk business than market expectations.

“In terms of the spin-off ratio, 0.64 (64%) goes to the existing entity KakaoX, and the new entity takes 0.36,” Shim Jae-seok explained.

Shim Jae-seok said, “KakaoAI has much better profitability, nearing 20%, while KakaoX doesn't even reach 10%.”

Analysis suggests that Kakao's corporate spin-off is unlikely to lead to regulatory advantages. The governance structure centered around founder Kim Beom-su will be maintained, meaning the same large enterprise regulations will apply. Instead, splitting into two companies could increase administrative complexity. No significant changes are expected in terms of regulation.

Shim Jae-seok mentioned, “One can say there are no regulatory advantages; rather, where it used to be just Kakao to consider, now it's split into two companies, and both are substantial.”

There are criticisms that managing conglomerate risks and restoring trust should take precedence over a simple business unit division.

Reporter Hong Jae-ui criticized, “The core of Kakao's problem is not this. Currently, the business structure is complex, and it has lost trust and reputation until now.”

Kakao's price-to-book ratio (PBR) is also 1.3x, compared to Naver's 1x, leading to counterarguments against claims that Kakao's corporate value is low.

Analyzing Kim Beom-su's intentions, some draw parallels to past share swaps between chairmen Lee Hae-jin and Lee Jun-ho.

Reporter Hong Jae-ui asked, “Is it possible that founder Kim Beom-su no longer wants to be involved in heavily regulated industries like taxi or payment services, and is he imagining the possibility of selling off stakes in those areas?”

This proposal requires approval from two-thirds or more of the votes cast by shareholders present and one-third or more of the total number of issued shares. The spin-off date is January 1 next year, with re-listing scheduled for January 27.

Reporter Hong Jae-ui explained, “An extraordinary general meeting will be held on December 17. Since this is a special resolution, it requires approval from two-thirds or more of the votes cast by shareholders present, and one-third or more of the total number of issued shares, for it to pass.”

Due to the DNA differences between E-Mart and Shinsegae, low internal morale and a perception of being a 'place of exile' became widespread, ultimately leading to an acknowledgment of failure and a decision to separate.

Reporter Hong Jae-ui commented, “Although it aimed for an integrated platform, both growth and profitability were poor... I actually think it's a case that failed in all aspects.”

It aims to secure a competitive edge in the grocery sector by launching a new membership 'SSG7 Club' and reinforcing its store-based delivery network and quality control.

Reporter Hong Jae-ui analyzed, “E-Mart definitely feels Coupang's threat most directly, and whether they want to or not, they have to fight, so they are strengthening this area.”

It established a dedicated data center entity, 'SK Horizon,' and conducted a capital increase targeting KKR and IMM, securing 1.2 trillion won to transform into an AI data center.

Reporter Hong Jae-ui explained the background, “The idea came up to spin off the data center to attract large-scale investment and make it an AI data center, so the company was divided into data center and non-data center businesses.”

Within the SK Group, AI infrastructure businesses are divided between SK Horizon and SK Hyper. SK Horizon is attracting investors' interest by focusing on operating existing centers and building megawatt-class short-term AI data centers. In contrast, SK Hyper is responsible for operating gigawatt-class super-large data centers, but investors' mixed views seem to reflect the business reality.

Reporter Hong Jae-ui analyzed investors' perspectives, “Investors have the intention to invest in AI data centers, so they invested, right? Those investors thought, 'Oh, SK Group is doing AI data centers, where should I invest?' They invested in Horizon, not Hyper. I wonder if they are viewing Hyper as overly ambitious.”

This effectively suggests that SK Broadband will continue to play a crucial role within the group after the split, and SK Telecom's new growth engines will also be maintained through SK Horizon.

The reporter commented, “First of all, SK Broadband has overwhelmingly more revenue, and this time, the spin-off ratio is almost 0.84, so effectively, SK Broadband will take most of the core business.”

A spin-off is fundamentally used as a survival strategy for companies in crisis, protecting existing businesses while separating new ones. IBM, eBay, and HP are examples of U.S. companies that have undergone restructuring this way. However, in Korea, spin-offs are sometimes seen in a modified form, misused as a means for changes in governance or disputes between founders.

The reporter explained, “Basically, spin-offs are done by companies that are struggling. Companies that would die if they stayed as they are, so they defend their existing business as much as possible while separating new businesses.”

By severing past connections, virtuous cycles such as payment commissions can be interrupted, and business flexibility may decrease. There is also a possibility that each independent business unit will face profitability pressure.

The reporter pointed out, “Since related businesses often cannot be neatly cut like a knife through a radish, there's a possibility of losses by severing past connections.”