Rumors of Kakao Mobility Sale Surface... Kakao States "No Decision Made"

"Kakao Mobility Reviewing Various Measures for Sustainable Growth"

[Asia Economy Reporter Kang Nahum] Rumors have surfaced about the sale of Kakao's mobility platform subsidiary, Kakao Mobility. Kakao Mobility is the number one mobility platform in South Korea, with a cumulative 30 million subscribers and 10 million monthly active users.

On the 14th, multiple media outlets reported, citing sources from the investment banking (IB) industry, that Kakao is in talks with MBK Partners, the largest private equity fund in South Korea, regarding the sale of Kakao Mobility.

MBK Partners reportedly expressed interest earlier this year in acquiring about 40% of Kakao Mobility's shares from Kakao, but negotiations were temporarily halted due to disagreements over pricing.

Looking at Kakao Mobility's shareholding structure, Kakao holds 53.4% as the largest shareholder, while U.S.-based private equity firms TPG and Carlyle hold 27.0% and 5.8%, respectively. When Kakao Mobility attracted investment from Carlyle, the company was valued at 8.5 trillion KRW.

The main reasons behind the sale rumors include regulatory risks from the government and issues related to encroachment on small local businesses, which have made an initial public offering (IPO) difficult. Last year, Kakao Mobility faced strong criticism due to conflicts with the taxi industry and price increases stemming from monopolistic practices. Recently, with the designation of the designated driver industry as a small and medium-sized enterprise (SME) suitable sector, there are expectations that Kakao Mobility's business expansion may be hindered.

Additionally, plans to raise funds to enhance corporate value through an IPO have become difficult due to the recent downturn in financial markets, which is also cited as a reason for the sale rumors.

Kakao stated regarding the sale rumors, "We are reviewing various options for the sustainable growth of mobility, but no decision has been made regarding a sale." MBK Partners also denied the rumors, saying, "Negotiations for the sale of shares between Kakao and Kakao Mobility are not true."