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Business

Naver eyes online financial services with Mirae deal

Internet company swaps treasury shares with leading brokerage

SEOUL -- South Korea's largest internet company Naver is laying the grounds for becoming an online financial services provider by swapping its treasury shares with Mirae Asset Daewoo, the nation's No. 1 brokerage house.

Naver acquired a 7.1% stake in Mirae for 500 billion won ($439.3 million) after the market closed on Monday. With the deal, the internet company has become the third-largest shareholder of the securities company. Mirae also invested the same amount of money in Naver for a 1.7% stake.

"Naver will cooperate with Mirae Asset Daewoo closely in the future, introducing new global businesses integrating artificial intelligence technology and financial content," said Naver Chief Financial Officer Park Sang-jin in a statement. "[Mirae] is the best partner for a wide range of cooperation in overseas countries thanks to its global networks reaching nine countries all over the world."

Park said that Mirae is has a presence in Europe, the U.S., China, Hong Kong, Indonesia, Vietnam and Brazil. Mirae Asset last year acquired Daewoo Securities from state-run Korea Development Bank in a $2 billion deal.

The announcement comes as Naver is expanding its businesses beyond providing an internet service, extending to autonomous driving and startup investments. Analysts say that the agreement signals that the company is preparing to become a comprehensive financial service provider in the long term.

"Nave is making an initial step to enter the online financial business and provide comprehensive financial services to its users in the long term," said Angela Hong, a Nomura analyst. "We think Naver will be able to leverage the financial business license and various products of Mirae Asset Daewoo."

Park Hye-jin, an analyst at Kyobo Securities, said that it was a good deal for Mirae Asset Daewoo too. "It is positive that [Mirae Asset Daewoo] takes a platform for overseas market through Line's overwhelming market share in the Southeast Asia."

Line is Naver's messenger service which has drawn more than 1 billion users mainly in Japan and Southeast Asian countries.

Shares of Naver dropped 2.14% to 869,000 won on Tuesday. The benchmark KOSPI hit a fresh record high of 2,391.95, up 0.14%. Mirae Asset Daewoo's shares inched up 0.47% to 10,600 won.

Naver plans new data center near Seoul

Naver also plans to build a data center in a Seoul suburb, investing 480 billion won ($422 million) in the project over the next three years. The aims is to create a computing hub fit for the age of artificial intelligence, with operations slated to start in 2020.

The center will go up in Gyeonggi Province, where Naver has its headquarters. By placing the new hub far apart from its existing data center in the northern province of Gangwon, the company reduces the risk that its cloud services will malfunction in such events as natural disasters.

Additional reporting by Kenichi Yamada in Seoul.

 

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