Tencent Holdings Ltd. dismissed reports linking the Chinese tech giant to a potential acquisition of South Korea’s leading ride-hailing platform, just hours after media speculation suggested the company was pursuing a roughly 40% stake in Kakao Mobility Corp.
The Shenzhen-based conglomerate said Wednesday that reports about studying deals for both gaming company Nexon Co. and Kakao’s mobility unit were “untrue.” The denial followed a Korea Economic Daily report citing unidentified investment banking sources that claimed Tencent had approached financial investors already in talks with other potential buyers.
The stakes in question include TPG’s 29% holding and Carlyle Group’s 6.17% position, with Kakao Corp. maintaining control through its 57.3% shareholding. A VIG Partners-led consortium, which includes Goldman Sachs and Mubadala Investment, has been actively pursuing the acquisition with an estimated enterprise value of 5 trillion won ($3.4 billion) for the mobility operator.
Kakao Mobility essentially operates as Korea’s monopoly taxi-hailing service, commanding over 90% market share through its Kakao T platform. The company reported 62.2 billion won ($42.6 million) in operating profit for the first nine months of 2024, already exceeding its full-year 2023 profit of 38.7 billion won ($26.5 million).
The acquisition speculation emerged less than a week after Bloomberg reported Tencent’s renewed interest in Nexon, signaling potential broader ambitions in Korea’s tech sector. However, the swift denial raises questions about the accuracy of the initial reports or possible changes in Tencent’s strategic priorities.
Kakao Mobility faces ongoing regulatory scrutiny, including a 72.4 billion won ($49.6 million) fine from Korea’s Fair Trade Commission for alleged competition law violations.
