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Naver, CJ sign share-swap deal in strategic tie-up

Industry 20:00 October 26, 2020

SEOUL, Oct. 26 (Yonhap) -- South Korea's top online portal operator Naver and entertainment and logistics giant CJ Group signed a share-swap deal Monday in a strategic tie-up to boost their competitive edge in the e-commerce and entertainment industries, officials said.

Under the deal worth 600 billion won (US$531 million), Naver will acquire a 7.85 percent stake in CJ Logistics Corp., a parcel delivery company, a 5 percent stake in entertainment giant CJ ENM Corp. and a 6.26 percent stake in Studio Dragon, a drama production company owned by CJ ENM.

In return, Naver plans to provide stakes with the same monetary value to the three CJ units. The stakes in Naver to be held by CJ Logistics, CJ ENM and Studio Dragon are 0.64 percent, 0.32 percent and 0.32 percent, respectively.

The share swaps between Naver and CJ Logistics and CJ ENM are set to take place on Tuesday, while one involving Studio Dragon is expected to take about two weeks, the companies said.

The move is meant to set up a new cooperative model in content and e-commerce markets and strengthen their competitive edge against the influx of foreign rivals, such as U.S. streaming giant Netflix Inc.

As of May, Netflix held the most active mobile application users among over-the-top (OTT) services in South Korea at an estimated 6.37 million in a country with a population of 51 million, according to market researcher Nielsen KoreanClick, far higher than local player Wavve at 3.46 million and Seezn at 2.36 million.

entropy@yna.co.kr
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