Kakao Union Escalates Opposition to Spin-Off, Launches Campaign Against Small-Merger Plan
TECHWORLD ·
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Kakao's labor union has launched collective action against the company's push for a spin-off.
The union said it opposes a spin-off without sufficient explanation for workers and shareholders or measures to protect their rights.
Kakao plans to split its business structure into KakaoX, which will handle investment and portfolio management, and KakaoAI, which will handle AI technology-based services.
Kakao's labor union has launched collective action against the company's push for a spin-off. The Kakao chapter of the Korean Chemical and Textile Food Industry Workers' Union said in a statement on the 11th that it opposes a spin-off without sufficient explanation for workers and shareholders or measures to protect their rights. Kakao plans to split its business structure into KakaoX, which will handle investment and portfolio management, and KakaoAI, which will handle AI technology-based services.
As its first step, the union is encouraging shareholders to express opposition to the planned absorption merger of Kakao Investment. As a future measure, it is also considering a joint response with minority shareholders.
The Kakao chapter argued that while the company has presented the spin-off structure and timeline, it has not adequately explained why the spin-off is necessary. It also said there has been insufficient explanation of problems that cannot be solved under the existing structure, as well as the burdens and risks that would arise from the spin-off.
The union said that the principle of job succession alone is not enough to protect workers' employment and working conditions. It therefore called for the company to disclose in detail the staffing allocation criteria for each spun-off entity, concrete measures to guarantee wages, evaluations, welfare and length of service, and specific employment measures for organizational restructuring and overlapping functions.
The Kakao chapter is also raising concerns about the possibility of business restructuring at KakaoX, which will be responsible for investment and subsidiary management after the spin-off. It said that if there are future subsidiary sales, business transfers or changes in control, principles must be established to guarantee job succession for workers at affiliates, protect working conditions and require prior consultation with the labor union.
Even on the assumption that shares in the spun-off company will be allocated proportionally to existing shareholders, the Kakao chapter said information disclosure is needed to protect minority shareholders. It also said that future additional listings, future capital increases, transactions between affiliates and business restructuring could all affect shareholder value, and that the company needs to disclose the basis for its valuation of the spin-off and its subsequent restructuring plans.
As its first response, the Kakao chapter is encouraging participation in the expression of opposition to the absorption merger of Kakao Investment. The merger is a small-scale merger scheduled to take effect on January 1, 2027, and the surviving company will be KakaoX, which will be launched after the spin-off.
A small-scale merger is a procedure that proceeds with board approval rather than shareholder meeting approval. According to the notice cited by the union, shareholders eligible to express opposition are those listed on the shareholder register as of September 7, 2026, and if shareholders holding 20% or more of the total outstanding shares object within the period, the merger cannot proceed as a small-scale merger.
The Kakao chapter said this expression of opposition is separate from the procedure for opposing the spin-off itself. It described the move as the first step in demanding that the company fully explain the necessity and impact of the spin-off to workers and shareholders before the governance overhaul. It also said it plans to encourage participation from union members and minority shareholders.
In line with this, the union has demanded that the company explain in detail why the spin-off is necessary and what effects it will have. It also listed as demands written guarantees of employment and working conditions, disclosure of staffing allocation criteria, disclosure of objection procedures, prior consultation with the union in the event of organizational restructuring, business transfers or sales, disclosure of spin-off valuation information, and disclosure of information on subsequent transactions.
Seo Seung-wook, head of the Kakao chapter, said workers' rights need to be guaranteed and shareholders should also be able to make decisions based on sufficient information. He added that the company should first explain why the spin-off is necessary and also explain measures to protect employment and shareholder value. He also suggested that the union could work jointly with minority shareholders if necessary.
Source: TECHWORLD · Kim Seung-gi
Original: https://www.epnc.co.kr/news/articleView.html?idxno=406842
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Source: TECHWORLD
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