Capital Calls: South Korean deals tell tall tales

Capital Calls: South Korean deals tell tall tales

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

New co-CEOs of Kakao Corp Yeo Min-soo and Joh Su-yong attend a news conference in Seoul, South Korea, March 27, 2018. REUTERS/Kim Hong-Ji

HONG KONG (Reuters Breakingviews) – Concise insights on global finance.

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SERIAL ACQUIRERS. Two South Korean web giants are embarking on their next overseas chapters. Kakao Entertainment said on Tuesday it is buying bite-sized fiction apps Tapas Media and Radish Media, for a combined $950 million. Rival Naver also just completed its acquisition of Toronto-based storytelling platform Wattpad for more than $600 million here.     

The North American acquisition spree makes sense strategically. The webtoon, or digital comic, producers, are both eyeing potential U.S. initial public offerings. Kakao Entertainment’s boss reckons his business could be worth more than $18 billion in a listing. Demand for niche genres and new formats is on the rise. Sony is forking out $1.2 billion for AT&T’s anime streaming service Crunchyroll, although that deal may be facing regulatory concerns. At $440 million, Kakao is paying an eye-watering 22 times trailing sales for Radish. Some of these new content deals will end up shelved in the financial fantasy section. (By Sharon Lam)

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