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Kakao Pay’s Takeover Bid for Siebert Financial Collapses Amid Legal Concerns

Siebert to Compensate Kakao Pay with $5 Million Following Agreement Termination; Future Collaborations Uncertain
South Korea
k 377300.KO Mid and Small Cap 2000 Tech 350
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In a significant turn of events, South Korean mobile payment giant Kakao Pay’s planned acquisition of US-based Siebert Financial Corp. has been abruptly called off. The deal, initially set in motion in May with Kakao Pay acquiring a 19.9% stake in Siebert for $17.9 million, was poised to mark a substantial expansion of the Asian mobile platform’s reach into the American financial market.

However, complications arose surrounding the legal status of Kakao Corp.’s top executives, including founder and chairman Kim Beom-soo. South Korean authorities have increased scrutiny over the company for alleged violations of the Capital Markets Act and unfair business practices. These developments have cast a shadow over the company’s ambitious expansion plans.

In response to the growing legal uncertainties, Kakao Pay and Siebert mutually agreed to terminate their second tranche stock purchase agreement. As part of the settlement, Siebert will pay Kakao Pay a sum of $5 million in installments, spanning from March 2024 to June 2026. This decision underscores the challenges faced by international business ventures in navigating complex legal landscapes.

Siebert, with its extensive portfolio of brokerage and financial advisory services, remains a significant player in the American financial sector. The company, established in 1967, continues to explore new growth opportunities independently.

Despite the setback, Kakao Pay retains a significant stake in Siebert and the right to appoint one director to its board. This ongoing strategic investment indicates a potential for future collaboration, albeit under a cloud of current uncertainties. Kakao Pay’s CEO Shin Won-Keun remains optimistic about the possibilities of working together to foster growth in both entities.

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