[Asia Economy Reporter Seungjin Lee] Kakao's management and labor union, who have been in conflict over the sale of Kakao Mobility, reached a turning point after an emergency meeting. When Kakao's executives expressed their willingness to engage in dialogue, the union took a step back by canceling scheduled activities such as the anti-sale signature campaign.
"No decision made on sale"... Union takes a step back
According to Kakao on the 29th, the company held an emergency meeting with the union on the morning of the 27th to discuss opinions regarding the sale of Kakao Mobility. The meeting was attended by Kim Seongsu, head of Kakao Community Alignment Center (CAC), and Bae Jaehyun, Kakao's Chief Investment Officer (CIO). At the meeting, Kakao's management reportedly stated, "Nothing has been clearly decided regarding the sale of Kakao Mobility," and "We will continue to communicate with employees."
Following the meeting, the union abruptly canceled its previously scheduled plans. From the morning of that day, the union had been conducting a signature campaign opposing the sale of Kakao Mobility targeting 15,000 employees across all Kakao affiliates, intending to deliver the signatures to Kakao CEO Namgung Hoon and Kim Beom-su, head of the Future Initiative Center. Additionally, a press conference opposing the sale of Kakao Mobility to private equity funds was planned for the 28th but was tentatively postponed due to venue issues. Initially, the union had planned to proceed with the press conference even in rainy weather.
The union's retreat from its hardline stance came as the company showed a strong willingness to engage in dialogue. The strong backlash from employees initially stemmed from the fact that the sale was being considered without any information being shared with them, which then became public. At the meeting, the company promised to share upcoming matters related to the sale and actively sought to appease the union. The direct involvement of Kakao's management also played a role. The CAC, led by Director Kim, coordinates strategic directions across all Kakao affiliates, and CIO Bae is a key figure related to the sale. Therefore, the union appears to have taken the company's claim that no sale plan has been finalized seriously.
High valuation and union opposition... Sale not easy
Industry insiders believe that the sale of Kakao Mobility will not be easy due to its high valuation and the strengthened influence of the union.
Kakao Mobility is owned 57.5% by Kakao, with TPG and Carlyle holding 29% and 6.2%, respectively. The leading potential buyer, MBK Partners, South Korea's largest private equity fund (PEF) operator, would gain management control of Kakao Mobility by acquiring only Kakao's stake. However, paying the company's valuation, which reaches 8.5 trillion KRW, is expected to be challenging.
Moreover, Kakao Mobility became the first Kakao affiliate to form a majority union, which is likely to be an obstacle to the sale. In particular, the union strongly criticized the "private equity fund sale rumors," stating, "If the executives who promised the platform's social responsibility try to sell the company to a private equity fund that is the furthest from that, no one will understand."
Previously, in 2015, MBK Partners acquired Homeplus for about 7 trillion KRW. It was regarded as the largest acquisition in South Korea at the time, and Kakao Mobility is evaluated to potentially surpass that. Additionally, MBK Partners has been in conflict with the Homeplus union for years, and the industry expects that Kakao Mobility may face similar burdens following Homeplus's precedent.
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