SEOUL – Naver Financial, a unit of South Korean internet giant Naver, has agreed to acquire Dunamu, an operator of the country’s largest cryptocurrency exchange Upbit, in an all-stock deal valued at 15.13 trillion won ($10.27 billion).
The payment platform said in a regulatory filing on Wednesday that the deal, which is one of the largest in Asia this year, aims to secure future growth based on digital assets.
Naver’s fintech subsidiary plans to issue 2.54 shares for every one share in the operator of Upbit.
South Korea has a booming cryptocurrency market, and the merger would help Naver secure new growth drivers in digital assets and stablecoins, allowing investors to expect growth in its fintech business beyond its existing advertising, commerce and content operations, according to analysts.
“Upbit is the largest crypto exchange in South Korea with about 70% market share according to some reports and is hugely profitable,” said Siya Yang, head of marketing at Hong Kong-headquartered HashKey Group, a digital assets services firm.
“Naver can see synergy in the business as it can divert its own user traffic toward the exchange who provides financial products to mostly the younger generation,” said Yang.
Responding to speculation that Naver could list on the Nasdaq, CEO Choi Soo-yeon said on Thursday the company had no specific plans, adding that if a future listing is considered, it will be guided by the goal of enhancing shareholder value.
Naver shares jumped by more than 7% after news of the acquisition, but were trading down 4.2% as of 0507 GMT on Thursday.
Analysts attributed the drop to news about an “abnormal withdrawal” of 54 billion won worth of cryptocurrencies from Upbit on Thursday. Upbit apologised and said it would fully cover the amount using its own assets.
($1 = 1,462.9000 won)
(Reporting by Hyunjoo Jin, Additional reporting by Kane Wu in Hong Kong, Heekyong Yang in Seoul; Editing by Louise Heavens, Ed Davies)
