Kakao recently stated that there is "no decision made" regarding rumors of selling its subsidiaries. However, it acknowledged that it is discussing various methods with private equity (PE) firms regarding the timing of investment recovery, while not completely denying the possibility of subsidiary sales.
Shin Jong-hwan, Kakao's Chief Financial Officer (CFO), noted during a conference call following the announcement of 2025 first-quarter results on the 8th that there is "nothing specifically decided" regarding rumors of subsidiary sales. However, he added, "It is true that we are discussing recovery methods as the timing for investment recovery comes for the PEs that recently invested in the Kakao Group."
Kakao is pushing for operational efficiency by reorganizing its subsidiaries and focusing on core businesses. The new CFO stated, "The number of subsidiaries is expected to decrease from 147 in May 2023 to 104 once the sale of Neptune is completed," and added, "Separately, we are continuing our long-term strategy defined around KakaoTalk and artificial intelligence (AI), which remains unchanged." Neptune is a subsidiary of Kakao Games.
The CFO also said, "As the volatility in the recent environment expands, it is somewhat challenging to accelerate the efficiency work," and emphasized, "We will do our best to pursue operational efficiency while considering the situations and positions of various internal and external stakeholders, including shareholders and partners."
The market analysis suggests that as Kakao pushes forward with operational efficiency and accelerates the reorganization of its subsidiaries within the group, it could sell equities of major affiliates such as Daum, Kakao Entertainment, and Kakao Mobility to PE firms. While efforts were made to pursue initial public offerings (IPOs) for key subsidiaries, the controversy over split listings arose, and with the continued market downturn, the direction has shifted toward sales. Additionally, the point that Kakao is securing resources to focus on core businesses such as artificial intelligence (AI) is also cited as a factor supporting rumors of subsidiary sales.
Kakao's consolidated results for the first quarter of this year recorded revenue of 1.8637 trillion won and operating profit of 105.4 billion won. The operating profit margin is 5.7%. Compared to the same period last year, revenue decreased by 6.3%, and operating profit fell by 12.4%.