SEOUL (Reuters) - South Korean messaging app operator Daum Kakao Corp said it has acquired social networking assets from U.S.-based Path Inc, giving it a strong presence in Indonesia and sending its shares surging 10 percent on its push to expand globally.
While Daum Kakao owns South Korea’s dominant chat app KakaoTalk, investors have been worried that KakaoTalk’s global user base lags far behind rivals like Facebook Inc’s WhatsApp and compatriot Naver Corp’s Line.
“This acquisition marks the first of the many global business approaches Daum Kakao will take in the coming years,” the company said in a statement, adding that in addition to acquisitions it would also explore investment and partnership opportunities.
Daum Kakao will purchase social networking service Path which has 10 million monthly active users, most of them in Indonesia, making it one of the top three SNS services in the Southeast Asian country. It will also buy messaging app Path Talk.
Terms of the deal were not disclosed.
“This deal establishes a new stronghold country and could generate further growth momentum in nearby countries,” said Kyobo Securities analyst Lee Seong-bin.
Efforts by Daum Kakao to date to grow in markets like Indonesia, the Philippines and Malaysia had failed to gain traction.
In addition to strong position in Indonesia, Path has also been growing rapidly in Saudi Arabia.
Daum Kakao’s shares were trading at 117,700 won in afternoon trade. At one stage, it rose 12 percent to its highest level in more than two months.
Reporting by Se Young Lee; Editing by Edwina Gibbs