Talks over merging Korea’s two major streaming service providers, Tving and Wavve, remain adrift, with efforts to reconcile the differing interests of each stakeholder dragging on for seven months.
Major shareholders of the two businesses are expressing their steadfast commitment to the merger, but industry officials estimate it will take several more months to see an actual deal containing details such as the merger ratio.
SLL, a drama production and a major shareholder of Tving, released a statement Friday that the company is “taking a positive stance over the talks,” denying reports that the merger may fail due to SLL’s “excessive demands for higher returns for content it provides compared to other content providers.”
The shareholders of Tving and Wavve began talks for the merger in December last year to create the largest video streaming platform in Korea and challenge Netflix’s control of the domestic market.
Initially, contentious issues were the merger ratio and 200 billion won ($145.2 million) of convertible bonds (CBs) issued by Wavve’s largest shareholder, SK Square. SK Square raised approximately 200 billion won in November 2019 by issuing 추천 the CBs with a 5-year maturity, under the condition of a successful initial public offering within that period.
However, disputes over these issues were reportedly resolved in April. According to industry officials, the shareholders temporarily agreed to exchange 1 Wavve share for 1.6 Tving shares, aiming to value the merged firm at 2 trillion won. They also decided that the merged firm would cover a certain portion of the CBs issued by SK Square.
Despite the agreements, the shareholders are yet to reach an official agreement, and rumors casting a skeptical outlook on the merger are persistent over the deal.
Market watchers attribute the protracted negotiations to the complex shareholding structure of the two companies.