[M&A Insights] From Wallets to Payments... Naver and Dunamu Aim for Vertical Integration of the 'Token Economy'

Strategic Move to Secure Leadership in the Digital Currency Platform
Stock Price Retreats After Initial Surge on Merger News
"Growth Strategy Must Be Clarified During the Merger Process"

One of the most notable deals in last year's mergers and acquisitions (M&A) market was undoubtedly the announced merger between Naver Financial and Dunamu. In particular, there is growing interest in the potential emergence of a "digital asset super platform." This is because Naver possesses the traffic and artificial intelligence (AI) technology capabilities of Korea's leading portal, Naver Financial has strengths in payment and MyData services, and Dunamu owns the infrastructure of Upbit, the largest digital asset exchange in Korea, among other assets.

Beyond Platform Integration... Vertical Expansion into Wallets, Payments, and Token Issuance

Previously, Naver Financial and Dunamu officially announced their merger on November 26 of last year. This came about two months after news of the M&A between Naver and Dunamu began to spread at the end of September. Through a comprehensive stock swap, Dunamu will become a wholly owned subsidiary of Naver Financial. The combined corporate value of the merged entity is estimated at approximately 20 trillion won, with Naver Financial and Dunamu valued at 4.9 trillion won and 15.1 trillion won, respectively. The exchange ratio has been set at about 1 to 3.06.

This merger is seen not merely as a business expansion, but as a "preemptive reordering" aimed at securing leadership in the digital currency ecosystem. Since Naver has already established an independent foundation for its financial business through the 2019 physical spin-off of Naver Financial, it is now in a much better position to expand into payments, remittances, and token issuance by leveraging Upbit's wallet infrastructure.

The blueprint for the Dunamu-Naver alliance can be broadly divided into three areas: the tokenized asset market, the payment market, and stablecoins (virtual assets linked to safe assets).

Jo Taena, a researcher at Eugene Investment & Securities, stated, "Dunamu and Naver Financial will provide transaction infrastructure and services for the asset tokenization market, and in the payment sector, Naver's AI technology will be combined with Dunamu's blockchain technology to open up a new payments market." "Both Team Naver and Dunamu are expected to grow into global companies that create value on a completely different level, moving beyond the simple 'platform' structure," she predicted.

Kim So-hye, a researcher at Hanwha Investment & Securities, emphasized, "This deal is understood to have been directly driven by Naver Chairman Lee Haejin's strong commitment," adding, "It can also be seen as a strategy to secure a new financial infrastructure through a significant strengthening of stablecoin and blockchain capabilities, as well as to pursue the full-scale globalization of Naver's services in commerce, content, and more."

Global Asset Tokenization Accelerates, Led by the U.S.

Internationally, the tokenization of all financial assets has already begun. Tokenization refers to converting various assets or rights into "digital tokens" on the blockchain.

Researcher Jo explained, "Tokenization is progressing in order from the dollar, money market funds (MMFs), stocks, bonds, to real estate and other alternative assets," adding, "The United States is now aiming to tokenize listed stocks and bonds as its next goal." If the "CLARITY Act" (Digital Asset Market Clarity Act) passes this year, the U.S. is expected to complete the tokenization of stocks and bonds within two to three years.

Park Sungje, a researcher at Hana Securities, analyzed, "Coinbase Global, a Nasdaq-listed company, is the largest cryptocurrency exchange in the U.S. and is evolving into a comprehensive financial services platform, covering spot and derivatives, custody for institutional investors, interest offerings, and its own blockchain solution (Base)." He added, "It is expanding its market share through strict regulatory compliance, stablecoin partnerships, and attracting large institutional clients."

According to the securities industry, the global stablecoin payment market is expected to grow from 2.9 trillion dollars this year to 56.6 trillion dollars by 2030. The connectivity of "AI agents" that understand and act on user requests has also increased.

For example, online payment service provider PayPal has launched features in its AI chatbot Perplexity that allow users to search for products and make purchases directly through conversation. Consumers can now complete their shopping with just questions, conversations, and clicks, without the need to navigate through websites, add items to carts, or go through lengthy payment processes. If stablecoins are utilized throughout this process, payment efficiency can be maximized.

Accordingly, Korea's financial authorities have also begun to upgrade infrastructure. The Bank of Korea emphasized last year, "Stablecoins show potential to complement the existing currency system, but securing system risk management and trust structures remains a challenge." In particular, whether to introduce and regulate won-based stablecoins is expected to have a direct impact on the merged entity's future strategy.

Persuading Regulators and Investors Remains... Business Structure and Revenue Model Transparency Needed

However, actual investor response in the market has been somewhat mixed. The merger news acted as a positive catalyst, causing Naver's share price on the KOSPI to surge from the 220,000 won range to the 270,000 won range in just two days, but some of those gains have since been given back.

Suh Jungyeon, a researcher at Shin Young Securities, assessed, "Investor memories of 'duplicate listings' have led to a more subdued stock price reaction than expected." She added, "The calculation of opportunity costs related to the market's many concerns and the wait is in itself a very rational viewpoint," and noted, "For Naver shareholders to regain a positive outlook for long-term growth, the growth strategy must be clarified during the merger process."

There are also remaining procedures such as review by the Fair Trade Commission, establishment of relevant regulations, and a special resolution at the shareholders' meeting. Researcher Jo noted, "The government's existing policy of separating financial and virtual asset businesses (the so-called 'golden separation') could pose an obstacle during the Fair Trade Commission's approval process, but recently, financial authorities have mentioned the possibility of some regulatory easing." She also pointed out, "Naver Financial is not a licensed financial company but an electronic financial business registered under the Electronic Financial Transactions Act, which lessens the regulatory burden."

The shareholders' meeting related to the merger is scheduled for May 22 of this year. In the case of a comprehensive stock swap, a special resolution at the shareholders' meeting is required, with approval from at least two-thirds of the attending shareholders. Researcher Kim So-hye predicted, "As government review and shareholder interests are coordinated, the likelihood of the final deal proceeding without issue is high," adding, "It will take at least six months to close the deal."

Ultimately, this year marks a turning point for Korea's digital asset ecosystem, shifting from 'speculation' to 'infrastructure establishment.' The merger between Naver and Dunamu is likely to serve as the starting signal for this transition. The market is closely watching to see how far-reaching the impact of this signal will be during the execution of their strategies over the next one to two years.