South Korea’s Kakao Mobility Corp. is looking to acquire Europe’s top taxi platform, FreeNow.

According to investment banking sources on Wednesday, Kakao Mobility recently submitted a preliminary bid proposal to acquire FreeNow, whose major shareholders include Mercedes-Benz Mobility AG and BMW Group. FreeNow operates in 170 cities across 11 European countries, including Germany, the United Kingdom, Spain, and Italy, serving as the European version of Korea’s Kakao T.

Kakao Mobility has conducted due diligence on FreeNow for the past two months and plans to submit a formal bid to acquire approximately 80 percent of FreeNow as early as next week, according to sources.

“Kakao Mobility has been in multiple meetings with FreeNow management since the middle of 2023 and initiated corporate due diligence on the platform,” according to a source familiar with the acquisition process. “Both sides are aiming to finalize the deal and announce their acquisition plan within the year.”

The acquisition amount is expected to be in the hundreds of billions of won, and Kakao Mobility is expected to finance it by using its own funds.

FreeNow, founded in Germany in 2009, is Europe’s largest mobility platform, with an 83 percent market share in the continent’s taxi-hailing market. The platform also has a 19 percent market share in the ride-sharing industry in the region, second only to Uber Technologies, Inc.

FreeNow is an essential mobility service when traveling in Europe, just as Grab is a must-have application when traveling in Southeast Asia.

If successful, the deal is expected to be the largest acquisition of a European Information Technology (IT) company by a Korean company. There have been quite a few cases of Korean platform companies acquiring large U.S. platform companies, such as Naver Corp.’s acquisition of Poshmark, Inc., but their efforts in the European market have been relatively weak thus far. In this regard, Kakao Mobility’s acquisition of FreeNow is expected to serve as a signal for Korean platform companies to actively target the European market.

Of note is Kakao Mobility’s aim to transform into a global company by using the European market as a bridgehead after its acquisition of U.K. mobility brokerage platform Splyt in March 2023. Founded in 2015, Splyt connects consumers with major global platforms such as Uber, Grab, Careem, Cabify, Trip.com, and Booking Holdings.

By Kang Doo-soon and Yoon Yeon-hae

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