Board Meetings Scheduled for the 26th; Merger Proposal to Be Announced if Approved
Lee Hae-jin and Song Chi-hyung Expected to Attend Press Conference Directly
The merger between Naver Financial, which operates the leading online simple payment service in Korea, and Dunamu, which runs Upbit, the country's largest virtual asset exchange, is imminent. Both companies plan to convene their boards of directors to discuss the merger proposal and then publicly announce the outcome.
According to the IT industry on November 25, Naver Financial and Dunamu will each hold board meetings on November 26 to discuss the merger proposal. If the proposal is approved by the respective boards, the companies plan to publicly announce the merger on the following day, November 27.
Lee Hae-jin, Chairman of the Board of Naver, is speaking at a meeting between President Lee Jae-myung and Jensen Huang, CEO of Nvidia, held on the 31st at the Gyeongju Hwabaek Convention Center, the venue for the APEC Summit. Photo by Yonhap News Agency
It is expected that Lee Hae-jin, founder and Chairman of the Board of Naver, and Song Chi-hyung, Chairman of Dunamu, will attend the announcement of the merger proposal and participate in a Q&A session. Top executives from both companies, including Naver CEO Choi Soo-yeon, Dunamu CEO Oh Kyung-seok, and Naver Financial CEO Park Sang-jin, are also expected to be present.
The ownership structure will also change after the merger is completed. Song Chi-hyung, Chairman of Dunamu, is expected to become the largest shareholder of Naver Financial, while Naver is likely to become the second-largest shareholder.
Industry insiders believe that, given the scale of the two companies, the stock swap ratio for the merger between Naver Financial and Dunamu will likely be 1 to 3. However, the exact ratio and specific merger procedures will become clearer during the board meetings. For the merger to proceed, a special resolution at a general shareholders' meeting must follow the board's approval. This requires the consent of at least two-thirds of the shareholders present and at least one-third of the total issued shares.
Once the stock swap is completed, Naver Financial, the financial affiliate of Naver, and Dunamu will exchange shares, resulting in Dunamu becoming a subsidiary of Naver Financial. In effect, Dunamu will become a sub-subsidiary of Naver. Upon completion of the merger, Song Chi-hyung, Chairman of Dunamu, will become the largest shareholder of Naver Financial, which will now include Dunamu as a subsidiary, while Naver will be the second-largest shareholder.
Through this merger, the two companies are expected to pursue new business opportunities such as a Korean won-based stablecoin. The business model will combine Naver and Naver Pay's commerce and simple payment ecosystem with Dunamu's strength in virtual asset trading. The two companies plan to jointly issue a Korean won-based stablecoin, which can then be used for payments via Naver Pay. This is expected to provide Naver with an opportunity to expand its business into virtual assets, in addition to its main areas of search and shopping.
However, regulatory reviews during the merger process are expected to be a variable. Since both companies are the leading players in domestic online simple payment and virtual asset exchange, their combination could raise concerns about market monopoly. Therefore, the Korea Fair Trade Commission is expected to conduct a detailed review to determine whether the merger will restrict market competition.
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