Upbit to be acquired by Naver Financial in stock swap
TL;DR Breakdown
- Naver Financial and Upbit operator Dunamu are reportedly seeking a stock swap to consolidate Dunamu into Naver affiliates.
- The move will make Dunamu a wholly-owned subsidiary of Naver Financial.
- Naver aims to issue new shares for the swap instead of current shareholders parting with their stake.
The Dong-A Ilbo has reported that South Korea’s tech giant Naver is pursuing a consolidation with Upbit’s parent company. The move would make Dunamu a wholly owned subsidiary under Naver Financial, integrating the company with the Naver group. Reportedly, Naver Financial will issue new shares for the consolidation, diluting the stakes held by current investors, Naver, and Mirae Asset Financial Group.
Upbit to come under Naver’s corporate umbrella
A comprehensive stock swap is different from a merger that breaks two existing companies into a new one. In a comprehensive stock swap, one of the companies becomes a holding company while the other becomes a wholly-owned subsidiary. This allows both companies to maintain their existing corporate structure but unifies the control under the holding company.
Reportedly, Dunamu’s management is planning to send a letter to its major shareholders in the near future. Moreover, both companies are promoting the stock swap while key details, including the exchange ratios, are being hammered out. Current shareholders of Dunamu include chairman Song Chi-hyung (25%), vice chairman Kim Hyung-nyeon (13%) and Kakao Investment (10%).
On the other hand, 75% percent of shares in Naver Financial are held by Naver, while the remaining are held by Mirae Asset Financial Group.
Naver and Dunamu’s collaborations
The swap is not the first time Dunamu and Naver have appeared in the same headline. In July this year, Naver Financial announced a collaboration with Dunamu on a Won-based stablecoin business. Earlier this month, Naver Financial announced the acquisition of a 70% stake in Dunamu’s Ustockplus, an investment app focusing on unlisted stocks.
With the planned consolidation, Naver would own both the country’s largest mobile payment network and the largest cryptocurrency exchange. The move could allow Naver to create a superapp enabling cryptocurrency transactions alongside traditional payments.
LINE, in which Naver is a major shareholder, recently announced its own superapp project aiming to bring crypto payments to its messenger app in collaboration with Kaia DLT Foundation.
