Naver agrees to acquire Upbit Parent in $10.3 billion deal

Internet giant Naver Corp. has agreed to acquire Dunamu Inc, the operator of South Korea’s largest cryptocurrency exchange Upbit, in an all-stock transaction valued at approximately $10.3 billion.

Under the deal unveiled today in a regulatory filing, Naver’s fintech arm, Naver Financial, will issue 2.54 new shares for every Dunamu share, a ratio that suggests the combined entity would be a $13.56 billion fintech powerhouse that combines payments, digital assets and AI-driven financial services.

“The integration of Dunamu will allow us to create powerful synergies between AI, search, digital payments and blockchain technology,” a Naver official told The Korea Herald. “As global technology shifts toward a Web3 paradigm, this merger positions us at the forefront of innovation and international expansion. »

Naver shares jumped 7% following news of the deal, but have since pared their gains to trade up 4% on the day.

Naver share price (Source: Google Finance)

Dunamu Chairman to Own Largest Stake in Naver Financial

A shareholder vote on the stock swap deal is scheduled for May 22, and the transaction is expected to be completed by June 30 if approved.

The deal must receive consent from Dunamu stakeholders, including Chairman Song Chi-hyung (25.53%), Vice Chairman Kim Hyoung-nyon (13.11%), Kakao Investment (10.59%), Woori Technology Investment (7.2%) and Hanwha Investment & Securities (5.94%).

The deal is also subject to several regulatory reviews. The Fair Trade Commission and financial regulators will likely review the stock swap and subsequent merger to determine market concentration, impact on consumers and systemic risks. This process could take a year or more.

Regulators are also expected to examine whether the deal warrants easing Korea’s long-standing guideline on the “separation of financial assets and virtual assets,” which restricts cooperation between traditional financial firms and businesses operating in the crypto space.

“We will broadly examine whether the relaxation of these regulations aligns with global trends,” said Kim Sung-jin, head of the Financial Supervision Service’s virtual assets division.

If Dunamu shareholders and regulators give the green light, Naver’s stake in Naver Financial would fall from the current 70% to 17% after the share swap.

Song will own the largest stake in Naver Financial after the exchange, but he and Vice Chairman Kim agreed to delegate their voting rights. This allows Naver to obtain 46.5% of the voting rights and gives the company a position of control over its financial arm.

Upbit owns 80% of the crypto market in South Korea

South Korea is one of the most active retail hubs in the global crypto market, and Upbit has over 80% of the country’s market share.

Best Crypto Spot Exchanges (Source: CoinMarketCap)

Upbit is also ranked among the five largest crypto exchanges in the world by trading volume, alongside Binance, Coinbase, Bybit and OKX.

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