SEOUL -- South Korea's SK Telecom and compatriot Kakao signed a 300 billion won ($257 million) share swap agreement on Monday to strengthen their cooperation in e-commerce, digital content and communications technology.
SK Telecom, the country's largest telecom company, aims to attract more than 50 million Kakao users to its own e-commerce affiliate, Eleven Street. Kakao meanwhile wants to sell its game and music streaming services on SK Telecom's media platform. Kakao runs the country's most popular chat app, KakaoTalk.
"This partnership will help the two companies compete with global players by offering new experiences and values to users," said Yeo Min-soo, co-CEO of Kakao, in a statement. "We will cooperate closely to innovate South Korea's information and communications technology ecosystem."
The announcement comes as South Korea's IT industry faces tough competition as new players pile in, both from other countries and other sectors. SK Telecom and Kakao said they will cooperate in such emerging fields as artificial intelligence, internet of things and fintech in the long term.
SK Telecom will sell 1.3 million of its treasury shares to Kakao next week in exchange for 2.2 million Kakao shares. After the deal, SK Telecom, which has a market cap of over 16 trillion won, will have 2.5% stake in the internet company. Kakao, whose market cap stands at over 11 trillion won, will own 1.6% stake in the telecom company. The two companies cannot sell the stakes for one year.
Samsung Electronics is also gearing up to develop AI technology, betting it will be the key part of their business in the future. Samsung hosted its Tech Forum in Silicon Valley last week, discussing the convergence of communication and computing.
Naver, the country's largest internet company, said it will launch a global AI research belt connecting researchers in South Korea, Japan, Vietnam and France.