Kakao will spin its KakaoTalk platform business out into a newly listed company, and the part leaving carries thirteen times the revenue of the part that keeps the listing

The company that keeps the listing is the smaller of the two.

Kakao Corp. filed a report on material facts with the Financial Services Commission and the Korea Exchange on 21 August, setting out a horizontal split of the group into two. The KakaoTalk platform business, and with it the advertising, commerce and artificial intelligence work, goes into a newly established company provisionally called KakaoAI Corp. What remains stays in the surviving company, provisionally called KakaoX Corp., which the filing describes as an investment business managing affiliates in techfin, content and mobility.

Measured on the split balance sheet at 30 June 2026, the surviving investment company reports revenue of 202,011,567,138 won for its most recent financial year. The division leaving reports 2,646,119,749,696 won. Divide one by the other and 13.1 times as much revenue is walking out of the listed entity as staying in it, which is the arithmetic rather than a figure the filing prints.

The ratio, and the working behind it

The split ratio is 0.6351463 to the surviving company and 0.3648537 to the new one. The filing shows how it got there: the new company's net assets of 2,914,973,933,225 won divided by the sum of pre-split net assets of 7,976,071,999,239 won and treasury stock of 13,361,027,965 won. Shareholders on the register at 31 December 2026 receive 0.3648537 shares of the new company for each Kakao share held. Treasury shares receive none. Anything below a whole share is paid out in cash at the closing price on the first day the new stock trades, and the new company takes those fractions into treasury.

The capital reduction at the surviving company runs to 36.48537 percent, which is the same number seen from the other side.

The calendar

Four independent directors were present for the resolution on 21 August. None was absent. The shareholder record date is 23 November, the extraordinary general meeting is 17 December, and the plan needs a special resolution there to proceed. The split takes effect at midnight on 1 January 2027, with the reporting meeting and the registration both set for 4 January.

Trading is the part holders will feel. Kakao stock is scheduled to stop trading on 30 December 2026 and to resume on 26 January 2027, with the new company's shares listed the following day, 27 January, subject to a re-listing review by the Korea Exchange under the KOSPI listing regulation. The filing notes that the exchange decides, and that the dates can move.

Two protections that are not here

A Korean reorganisation of this size normally carries appraisal rights for dissenting shareholders and an objection window for creditors. Neither applies, and the filing gives a reason for each. Dissenters get no buyout right because this is a simple horizontal split and the new company's shares are to be re-listed rather than taken private. Creditors get no objection period because both companies remain jointly and severally liable for debts incurred before the split, with a right of indemnity running each way where one of them settles a debt allocated to the other.

Employees of the transferred division move across with their contracts, severance entitlements and collective agreements intact. So do the options: 3,438 officers and employees held 4,214,221 unexercised options on the day the plan was drawn, and those are apportioned between the two companies on the same ratio, at the same exercise price, with service before the split counted after it.

The rest of the plan is in section 13

The split is one move in four. Kakao Investment Corp. is to carry out a physical split of its own on 18 December 2026, creating a new Kakao Investment Corp. and renaming the surviving entity KakaoX Investment Corp. That renamed entity absorbs a company called IVG on 22 December. KakaoX then absorbs Kakao Investment by small-scale merger on 1 January 2027, the same day the main split takes effect. And KakaoX is to hand its shareholdings in Kakao Enterprise and KDCP over to KakaoAI before the financial year containing the split registration ends.

On why any of this is happening, the filing speaks for the company and the company alone. It says the two firms will have clearer identities and deeper expertise, that management transparency and the allocation of resources improve, and that separating the businesses lets each be valued on its own and resolves what it calls the structural undervaluation applied to the current complex portfolio structure. That is the company's account of its own reasoning. Whether the market agrees is a question for 17 December and after.