In a recent turn of events, Kakao Mobility’s plans to acquire ‘FreeNow,’ Europe’s leading taxi-hailing platform, have encountered a stumbling block, casting uncertainty over the future of the deal. FreeNow operates in 11 European countries, serving 170 cities and commanding an 83% market share in the continent’s taxi-hailing industry.
Insiders from the Korean IT industry report that negotiations, initially slated for a year-end conclusion, have faced challenges. As of Dec. 27, with only a few days left in the year, finalizing an agreement appears increasingly difficult, leading some to speculate that the negotiations may have effectively stalled.
Kakao Mobility’s endeavors included a two-month due diligence period starting in September, aiming to acquire approximately 80% of FreeNow’s stake. Despite submitting a preliminary bid proposal, the Kakao Investment Review Committee, leveraging Kakao’s 57.3% majority stake in Kakao Mobility, reportedly deemed the acquisition price too high, resulting in the rejection of the original plan.
The decision to reject is believed to be led by Chung Shin-a, who was recently nominated as the CEO of Kakao. Chung proposed a revised acquisition plan, focusing on specific countries and cities with high tourism demand, such as the UK, Spain, Italy, and France. Industry sources indicate that the initially proposed sale price by FreeNow and the acquisition valuation by Kakao Mobility ranged between 300 billion won and 400 billion won.
In response, Kakao Mobility submitted another acquisition proposal earlier this month, but reports suggest that FreeNow expressed a negative stance. Kakao Mobility has stated that it is currently in discussions with FreeNow to iron out the details.
