Naver Financial and Dunamu, the parent company of Upbit, announced on Monday that their stock-swap transaction has been delayed to Dec. 31. The delay stems from the changing local regulatory landscape in South Korea. This marks the second postponement of the deal. In March, the two companies pushed back the transaction date from June 30 to Sept. 30. The transaction was first announced last year as Naver Financial, the financial services subsidiary of local IT giant Naver, confirmed its merger deal with Dunamu. The delay was disclosed in a filing on Dart, South Korea's official electronic disclosure system for corporations. South Korea's proposed Digital Asset Basic Act, currently under development, includes a debated clause that may limit major shareholder stakes in domestic cryptocurrency exchanges to 20%, potentially impacting the transaction's outcome.
Naver Financial to Issue 87.56 Million Shares for Dunamu Stock Swap
To facilitate the transaction, Naver Financial plans to issue 87.56 million new shares, worth approximately 15.13 trillion won ($9.9 billion). A share of Naver Financial was priced at 172,780 won ($113.40). The exchange ratio is 2.5422618 shares of Naver Financial for every one share of Dunamu. Through the transaction, the two companies aim to secure future growth momentum driven by digital assets. Industry watchers expect Naver to integrate Upbit's crypto infrastructure into its domestic financial services network.
Digital Asset Basic Act Debate Impacts Transaction Timeline
In the latest filing, the two companies noted that the state of progress in the regulatory process, registration with authorities, and approval of changes in corporate structure may delay the transaction or potentially nullify the agreement. The companies mentioned that the upcoming Digital Asset Basic Act, a key legislation for the regulation of the crypto sector in South Korea, is currently being developed, and that the contents of the legislation may impact the progress or outcome of the stock exchange.
There is an ongoing debate about a potential clause in the act that would limit the amount of stake a major shareholder can hold in a domestic cryptocurrency exchange. 20% is being discussed as the baseline. This would also apply to existing companies' structures, including Upbit's. South Korea's financial authorities say the limit could alleviate oligopoly in the local exchange market and bring transparency to corporations in the digital asset space. Lawmakers and industry participants argue that it is unconstitutional and infringes on companies' right to engage in economic activity.
FAQ
What did Naver Financial and Dunamu announce on Monday?
Naver Financial and Dunamu announced on Monday that their stock-swap transaction has been delayed to Dec. 31, marking the second postponement of the deal.
Why was the stock-swap transaction delayed?
The delay stems from the changing local regulatory landscape in South Korea, specifically the ongoing development of the Digital Asset Basic Act and a debated clause that may limit major shareholder stakes in domestic cryptocurrency exchanges to 20%.
What are the terms of the Naver Financial and Dunamu stock swap?
The exchange ratio is 2.5422618 shares of Naver Financial for every one share of Dunamu. Naver Financial plans to issue 87.56 million new shares worth approximately 15.13 trillion won ($9.9 billion), with each share priced at 172,780 won ($113.40).
