Kakao Games says no decision made on merger with Line Games

Kakao Games's office in Pangyo, Gyeonggi Province / Courtesy of Kakao Games

Kakao Games Corp. said no decision has been made regarding a potential merger with Line Games Corp., a game publishing company under the Japanese tech firm LY Corp., during a shareholder meeting held Monday.

"Nothing has been decided yet over a merger. But we could say there will be business partnerships," the game company's chief financial officer (CFO), said, noting the mobile game SMiniz created under a partnership between Line Games and SM Entertainment.

Market watchers have widely speculated that Kakao Games could merge with Line Games, after its largest shareholder was changed to an investment purpose company called LAAA Investment, backed by LY Corp., or Line Yahoo, since last week.

LAAA Investment has also participated in the capital increase and the issuance of convertible bonds worth a combined 300 billion won ($200.4 million).

The Kakao Games CFO said the company plans to penetrate new markets, particularly the Southeast Asia region, saying that Line has started to gain a strong foothold in the mobile market there.

"We plan to target the new market in a manner similar to the past success experience of Kakao Games," the executive said.

Also Monday, the gaming company approved a resolution to appoint Kim Tae-hwan, the vice president of Line Games, and Lee Si-woo, the chief business officer of Kakao Games, as inside directors.

Kim and Lee will take office as co-chief executive officers of Kakao Games, following approval by the board of directors.