Kakao union seeks to block company split-off, targets National Pension Service

Kakao's labor union is mobilizing to prevent the tech giant's controversial "split-off" plan from passing at an upcoming extraordinary shareholders' meeting in December. The union, affiliated with the Korean Chemical, Fiber and Food Workers' Union, is targeting major shareholders, including the National Pension Service (NPS), to garner enough opposition votes to block the proposed corporate restructuring.

The union announced its strategy on Tuesday, stating its intention to persuade the NPS, Kakao's third-largest shareholder with a 5.40% stake, to vote against the split-off. The plan requires a special resolution, meaning it needs approval from at least two-thirds of the votes cast and one-third of the total issued shares. The union believes that securing opposition from the NPS, along with other institutional investors and individual shareholders, could thwart the plan.

“

Kakao is close to a 'people's stock' with many individual investors. We have more common ground with the general public than with a few institutional investors.

Seo Seung-wook, the union's branch chief, expressed confidence in their ability to block the proposal, even considering the founder's stake and allied shares. "Kakao is close to a 'people's stock' with many individual investors," Seo said. "We have more common ground with the general public than with a few institutional investors." He added that while the founder and allied shareholders hold about 24% of the company, this is not a majority, and a one-third opposition vote among attending shareholders could lead to the proposal's rejection.

The union plans to extend its campaign to rally support from individual shareholders and the public, highlighting the perceived problems with the split-off. Kakao announced its plan on November 21 to divide into a holding company, Kakao X, overseeing content, mobility, and financial services, and a new entity, Kakao AI, focusing on AI, advertising, and commerce. The union opposes this division, citing past management failures and job insecurity resulting from previous mergers and spin-offs.

“

While the founder and allied shareholders hold about 24% of the company, this is not a majority, and a one-third opposition vote among attending shareholders could lead to the proposal's rejection.