LY Corporation, the operator of LY Corp. (formerly LINE Yahoo), will become the largest shareholder of Kakao Games (293490.KQ) through an investment of approximately 300 billion won ($211 million). Kakao, the current largest shareholder, will step down to become the second-largest shareholder.
Kakao Games announced Wednesday that it is pursuing a strategic investment and ownership restructuring to accelerate its push into global markets and strengthen future growth drivers.
According to the regulatory filing, LAAA Investment, a special-purpose investment vehicle funded by LY Corporation (LINE Yahoo), will participate in the deal. LAAA Investment plans to acquire a portion of Kakao's stake in Kakao Games in May, and will also subscribe to new shares and convertible bonds issued by Kakao Games.
Upon completion of the transaction, LAAA Investment will become the largest shareholder of Kakao Games, while Kakao will continue its strategic partnership with Kakao Games as the second-largest shareholder.
Kakao Games will secure approximately 300 billion won through the deal. The company plans to use the funds to bolster its competitiveness in global markets and build a foundation for mid- to long-term growth. Kakao will also reinvest a portion of the proceeds from the sale of its existing shares into the transaction, maintaining its partnership with Kakao Games and supporting the company's stable business operations and long-term growth.
Kakao Games said the ownership restructuring will serve as an opportunity to strengthen its business momentum in global markets and expand the scope of its gaming business through various collaboration opportunities. In particular, the company plans to broaden its collaboration with the new largest shareholder in key global markets including Japan, and gradually enhance its global competitiveness based on its development capabilities and service expertise.
Kakao has also stipulated in the contract provisions guaranteeing employment stability for executives and employees, as well as the continuation of existing working conditions. The company plans to ensure that Kakao Games' accumulated organizational capabilities and corporate culture are maintained.
"This strategic investment and ownership restructuring marks an important turning point for Kakao Games to elevate its global competitiveness and build a foundation for sustainable growth," a Kakao Games official said. "We will expand new growth opportunities in global markets through collaboration with partners including Kakao and LY Corporation."