Netmarble (251270.KS), the South Korean mobile game publisher, announced Friday that it will purchase 2,083,333 shares of affiliate Coway through open-market transactions for approximately 150 billion won ($105 million).
The company will first acquire around 40 billion won worth of Coway shares from February 7 through June 5, followed by additional purchases over the course of one year. Once the acquisitions are complete, Netmarble's stake in Coway, currently at 26%, will approach 30%.
The company explained that the stake expansion will stabilize its governance structure while enhancing financial soundness. The higher ownership ratio will increase equity-method valuation gains and boost dividend income in proportion to the expanded holdings, Netmarble added.
Over the past three years, Netmarble has secured 109.8 billion won in dividend income and approximately 300 billion won in equity-method gains from Coway. With the higher stake, dividend payments and equity-method valuation gains are expected to grow further going forward.
"This share purchase is a strategic investment that simultaneously achieves two objectives: stabilizing our governance structure and enhancing financial soundness," Netmarble said. "It utilizes a portion of proceeds from the monetization of investment assets we have been carrying out, and has absolutely no impact on our core gaming business."