The Board of Directors of Kakao Page Corp. (hereafter Kakao Page) and Kakao M Corp. (hereafter Kakao M) announced today that they resolved to merge the two companies into a new entity called KAKAO ENTERTAINMENT. The two companies will hold a general shareholders' meeting on January 26 and expect to complete the merger on March 1, 2021.

The combination of Kakao Page and Kakao M means the creation of a Korean entertainment giant which will generate over KRW 1 trillion in annual revenues. At a point where the global entertainment industry is going through hyper competition due to the appearance of new industry players, this strategic merger was resolved to give KAKAO ENTERTAINMENT a competitive edge in the market. This is also the first ever large-scale merger between the subsidiaries of Kakao Corp., the technology conglomerate behind Korea's most popular messaging app Kakao Talk.

The merger of Kakao Page and Kakao M is expected to create a robust synergy effect given the respective companies' capabilities in the content business and digital platforms and set the ground for KAKAO ENTERTAINMENT's next stage of growth through global expansion.

Through the merger, KAKAO ENTERTAINMENT will have an unparalleled business portfolio and value chain including 50 subsidiaries and affiliates across all verticals of the entertainment industry. Kakao Page provides a specialized value chain optimized to produce original contents as well as a global platform network while Kakao M provides expertise in creating music, TV series, films, performances as well as a portfolio of Korea's top creative talent.

With such foundation, KAKAO ENTERTAINMENT will expand its investment and strategic partnerships with industry leaders to grow into a global entertainment player. The company will not only diversify its business but also focus on producing blockbuster media franchises that can captivate global audiences and seek various ways to create synergies between combined assets.

Kakao Page commented, "The merger of Kakao Page and Kakao M is that of a strategic alliance to build a foundation to compete in the global entertainment industry. By combining the two companies' business acumen, capabilities and value chain, we aim to disrupt the global entertainment industry."

Kakao M commented, "The decision to merge our expertise in contents and digital platforms was made so we can compete in the hyper-competitive global entertainment sector in earnest. Together we can accelerate and evolve into a global player."