[Edaily Reporter Lee So-Hyun ] Kakao(035720)will use the capital gains from its investment in Dunamu to return value to shareholders following the spin-off of Kakao AI and Kakao X. Kakao X, set to launch next year, plans to use the proceeds from the sale of its Dunamu stake to repurchase and cancel a total of 300 billion won worth of its own shares over three years, and has decided to return a portion of any future investment gains to shareholders.

Kim Do-young, the CEO-designate of KakaoX, stated during an online meeting with minority shareholders on the 16th that Kakao Investment sold its Namuga Co.,Ltd stake for approximately 1.6 trillion won, generating an after-tax capital gain of about 1 trillion won. He announced that 30% of this amount would be returned to shareholders as a “token of commitment.” Going forward, Kakao X will allocate 30% of its subsidiaries’ after-tax dividends and 30% of investment gains (net of taxes and capital costs) toward dividends or share buybacks and cancellations.

Kakao AI will return 20–35% of its adjusted free cash flow (FCF) and will increase the return rate to a maximum of 40% if FCF grows by more than 50% year-over-year.

On this day, Kakao also answered questions from minority shareholders regarding the spin-off ratio, the difference between a spin-off and a corporate split, controversies over the strengthening of the largest shareholder’s control, synergies among affiliates, and plans for AI monetization.

The following are key Q&A highlights with Kim Do-young, CEO-designate of Kakao X; Shin Jong-hwan, Chief Financial Officer (CFO); Jeon Hyun-soo, Head of Business; and Wang Hyo-seon, Head of Growth Strategy.

- What criteria were used to determine the split ratio? Isn’t the Kakao AI ratio too low?

△Kim Do-young: Based on net asset value as of the end of June financial statements, the ratio was set at 0.64 for Kakao X and 0.36 for Kakao AI. The 3 trillion won in Kakao AI’s liabilities consists mostly of liabilities arising from business operations—such as prepaid top-ups—rather than interest-bearing financial debt.

- How will stock prices be determined during the relisting or re-registration following the spin-off?

△Kim Do-young=While the split is based on net asset value, the fair value of each company will be reassessed through the formation of the opening price and market trading at the time of relisting. Therefore, the market capitalization based on the split ratio may differ from the actual market capitalization after relisting.

- Why is Kakao Investment being merged? Why is it a small-scale merger?

△Kim Do-young=Since Kakao’s existing cash reserves of 2.3 trillion won will be transferred to Kakao AI, Kakao X needs investment funds. We plan to utilize the cash and investment assets of Kakao Investment through this merger. Because Kakao Investment is a wholly-owned subsidiary, the merger will proceed as a small-scale merger without a capital increase or issuance of new shares, meaning existing shareholders’ stakes will not be diluted.

-What happens to existing shares in a spin-off? How does this differ from a demerger?

△Shin Jong-hwan: If you hold 100 shares of Kakao, you will receive approximately 64 shares of Kakao X and 36 shares of Kakao AI based on the scheduled ratio. Unlike an asset spin-off, existing shareholders will directly hold shares in both companies at the same ownership ratio.

-What is the key timeline moving forward?

△Shin Jong-hwan=We plan to obtain approval for the spin-off plan at the extraordinary general meeting of shareholders on December 17, complete the spin-off on January 1 of next year, and proceed with the relisting of Kakao AI and the reclassification listing of Kakao X on January 27.

-How long will trading be suspended?

△Shin Jong-hwan: Based on current projections, it will be from December 30 of this year through January 26 of next year. Trading for both companies is scheduled to resume on January 27.

- If I oppose the spin-off, can I exercise my right to demand the purchase of my shares?

△Shin Jong-hwan: Since this is a simple spin-off and the newly established company is scheduled to be relisted on the KOSPI, shareholders are not eligible to exercise their right to demand the purchase of their shares.

- What are the shareholder return plans following the spin-off?

△Shin Jong-hwan: Kakao X will return 30% of its subsidiaries’ after-tax dividends and 30% of investment gains, net of taxes and capital costs. Using the proceeds from the sale of Dunamu, it will repurchase and cancel 300 billion won worth of its own shares over three years. Kakao AI will return 20–35% of its adjusted free cash flow (FCF), increasing to a maximum of 40% during periods of growth.

-Isn’t this a spin-off intended to strengthen the controlling shareholder’s influence?

△Shin Jong-hwan=Since all shareholders will receive shares in both companies at the same ratio, the largest shareholder’s ownership stake will remain unchanged. We also have no plans for follow-up transactions such as a capital increase through in-kind contributions or a transition to a holding company structure.

- Will business cooperation and synergies among affiliates be maintained after the split?

△Jeon Hyun-soo=Collaboration based on the Kakao brand and KakaoTalk will continue. We are also designing and testing an integrated membership program that connects mobility, content, and commerce, allowing users to access benefits in one place.

-What are Kakao AI’s specific service plans?

△Wang Hyo-sun=We will evolve KakaoTalk into an interface that connects not just people to people, but people to Agent AI. By combining on-device AI with our proprietary foundation model, we will expand from general-purpose assistants to specialized agents and, eventually, to the level of “digital twins.” Some of these services will be unveiled at If Kakao in October.

-What are Kakao AI’s monetization plans?

△Jeon Hyun-soo=We are targeting 5 million monthly active users for KakaoTalk’s AI services this year and plan to begin monetization in 2027. By 2028, we aim to increase the share of AI revenue in KakaoTalk-based businesses to double digits, and by 2030, we target 1 trillion won in AI revenue and total revenue of over 6 trillion won for Kakao AI.

- What is Kakao X’s growth strategy?

△Kim Do-young: In the fintech sector, we will expand into virtual assets; in mobility, we will focus on robo-taxis, robot trucks, and physical AI; and in content, we will expand into live entertainment and global fandom. At the same time, we plan to identify new business opportunities and invest in global innovative companies to translate investment returns into shareholder value.

-How will you communicate with shareholders following the spin-off?

△Shin Jong-hwan: We will continue to operate domestic and international NDRs, one-on-one meetings, earnings conference calls, and IR channels. Kakao X also plans to disclose the progress and implementation assessment of its corporate value enhancement plan at least once a year.

-Since Kakao X is effectively an investment company, won’t this actually lead to a larger discount on its stock price?

△Kim Do-young=Currently, it is difficult to fully convey information about our subsidiaries because it is overshadowed by explanations of Kakao’s core business. After the spin-off, once we disclose the performance and plans of Kakao Mobility, Kakao Entertainment, and Kakao Techfin in greater detail, we believe investors will properly assess their value, leading to a reduction in the discount rate.

-When will we be able to see results from Kakao’s AI business?

△Jeon Hyun-soo=The application of AI recommendation models is already expanding in advertising and e-commerce. We will demonstrate our Agent AI service at IfKakao in October and begin full-scale monetization through agent-based advertising and e-commerce starting in 2027. Once meaningful data has been accumulated following the official launch, we will consider disclosing user metrics.