A banner that includes the logos of Dunamu and Naver is displayed at Naver’s second workplace constructing in Seongnam, Gyeonggi Province, Thursday. Yonhap
Naver’s determination to accumulate crypto big Dunamu by its fintech arm Naver Monetary marks an unprecedented convergence of Large Tech and digital property. However the deal, introduced final week, faces vital hurdles, together with shareholder approval and lingering regulatory uncertainty, trade officers mentioned Sunday.
Naver Monetary mentioned Wednesday it plans to accumulate Dunamu as a completely owned subsidiary by a inventory swap deal, providing 2.54 shares of Naver Monetary for every Dunamu share. Executives say the purpose is to construct a world infrastructure that spans funds, finance and on a regular basis providers primarily based on synthetic intelligence and Web3.
To finish the inventory swap, slated for June 30 subsequent yr, the 2 firms should move a particular shareholder decision scheduled for Might 22 in that yr. Approval requires participation from not less than one-third of all issued shares and a two-thirds majority of these in attendance.
Whereas Naver Monetary is successfully beneath Naver’s management, Dunamu should safe extra shareholder help past the 41.7 % of its shares held by administration, together with Chairman Track Chi-hyung and Vice Chairman Kim Hyung-nyon.
It is usually notable that two firms included a clause permitting both aspect to stroll away if the train of appraisal rights exceeds 1.2 trillion gained ($816 million). With Dunamu providing 439,252 gained per share, opposition from simply 8 % of excellent shares may jeopardize the deal.
That makes successful over each main and minority shareholders crucial. The father or mother firm of Kakao Funding, Dunamu’s third-largest shareholder with a ten.9 % stake, is a direct competitor to Naver and is anticipated to be resistant. Minority shareholders have additionally expressed frustration over Dunamu’s failed home itemizing and lingering uncertainty surrounding a possible Nasdaq debut.
Regulatory approval is unlikely to return simply.
Monetary authorities are reviewing potential dangers tied to the convergence of digital funds and digital property. Korea’s regulators have traditionally drawn a tough line between the 2 industries, citing stability issues. Whereas some market watchers observe a softening stance, the authorized framework across the deal stays obscure and will probably delay approvals.
The Truthful Commerce Fee (FTC) can be weighing whether or not the deal may stifle competitors. Each Naver Monetary and Dunamu maintain dominant positions of their sectors, elevating antitrust issues.
“This merger raises an infinite variety of points for the monetary sector,” an official from the monetary authorities mentioned. “As there are at the moment no established laws for this space, we’re monitoring the scenario very carefully.”
Compounding the problem is a cybersecurity incident at Upbit, Korea’s largest cryptocurrency alternate operated by Dunamu. The corporate disclosed on Friday that the cyberattack, which occurred the day before today, resulted in consumer losses of about 38.6 billion gained. The incident has reignited issues over platform safety and dealt a blow to consumer belief at a crucial second.
Investor sentiment soured, with Naver shares closing at 244,000 gained on Friday, down 2.98 %, whereas the KOSPI fell 1.51 % to three,926.59. It marked the second consecutive day of losses for the tech big, following a 4 % drop on Thursday, a day after the mega merger deal was introduced.
Nonetheless, brokerages have positively assessed the emergence of a mega monetary platform valued at 20 trillion gained.
“Though the probability of the deal falling aside is taken into account low, traders might have a bit extra persistence till the FTC and Monetary Providers Fee attain their selections,” mentioned Jung Ho-yoon, an analyst at Korea Funding & Securities.
“As stablecoin and tokenized-asset markets develop quickly worldwide, Korea can be anticipated to open new markets by forthcoming laws.” Jung mentioned. “Naver and Dunamu are properly positioned to emerge as distinguished gamers on this area.”
