Exchange News: South Korea’s Internet Giant Naver to Take Over Upbit Parent Dunamu

Naver, South Korea’s internet giant, plans to acquire Upbit parent Dunamu via an equity swap, creating a “super app” and launching a KRW stablecoin.

South Korean internet giant Naver will formally confirm its plan. This means acquiring Upbit’s parent company, Dunamu, at next week’s board meeting. According to The Korea Times,  Dunamu also will hold a board meeting on November 26. This is to finalize the details. Naver will use its fintech subsidiary Naver Financial. This will be for a full equity swap for the purpose of acquiring Dunamu.

Naver’s Strategic Acquisition to Reshape Digital Finance Landscape

Following the integration, they will jointly launch a stablecoin project of KRW. They will also introduce different digital financial services. Naver is alleged to be pressing for an all-around stock swap. This is through its fintech division via its subsidiary, Naver Financial. The goal is to transform Dunamu into a 100% subsidiary. This move is focused on expanding its business in the digital finance sector.

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In detail, the two firms are anticipated to bring in a won-backed stablecoin project. This will be in addition to other digital finance initiatives. This move has the potential to transform the digital finance landscape in Korea. This will happen when the integration is complete.

South Korean internet giant Naver is set to confirm its acquisition of Dunamu. Dunamu is the company that owns the cryptocurrency exchange Upbit. This confirmation is on a board meeting next week on November 26. The deal, which is said to have been a stock swap, would see Dunamu come under the fold of Naver’s fintech division subsidiary, Naver Financial. This merger is aimed at creating a “super app.” This app integrates Naver’s payment, e-commerce and other services with trading in cryptocurrencies used in Upbit.

Deal Details, Strategic Goals, and Regulatory Hurdles

Details of deal are significant. The acquisition structure is a stock swap of Naver Financial acquiring Dunamu. Naver Financial will give new shares to Dunamu shareholders. Following the merger, Dunamu’s Chairman Song Chi-hyung is supposed to be the biggest shareholder. This is the case for the combined entity. Naver will have a diluted ownership stake

Strategic goals are ambitious. The merger plans to create an integrated digital finance ecosystem. This merges the massive user base and services of Naver with the crypto trading services of Upbit. A stablecoin launch is also on the cards. The companies are looking to expedite their joint development of won-pegged stablecoin. This would be integrated into Naver Pay. Global expansion is another objective. However, the deal is something that is regarded as a means of strengthening Naver’s presence in the global fintech market.

In addition, there is a potential for regulatory hurdles to exist. The merger may be scrutinized by South Korean regulators. This has been a matter of concern with regard to potential antitrust issues. The country’s firewall rule, which separates industrial and financial capital, could also be a problem.

After the two companies verify the plan at their respective board meetings next week, they must receive approval at a shareholders’ meeting. This is in order to formally begin integration procedures. Once the deal has been completed, Naver Financial’s biggest shareholder will likely be Dunamu Chairman Song Chi-hyung.

Lastly, the second-largest shareholder will be Naver. Naver is the dominant internet portal in Korea. Upbit is the largest crypto exchange in the country with the world’s 4th largest trading volume. This merger, therefore, is a mammoth integration of digital services.

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