South Korea’s CJ Group and Naver Corp. said Monday they have struck a 600 billion won ($531 million) share-swap agreement to forge a mega alliance in ecommerce and entertainment.

CJ ENM Co., the entertainment arm of CJ Group, and Studio Dragon Co., the drama production house under the conglomerate, agreed to each swap 150 billion won worth of shares with internet giant Naver. CJ Logistics Corp. would separately exchange shares worth 300 billion won with the portal giant.

CJ ENM and CJ Logistics would hand over treasury shares, while Studio Dragon would be issuing new shares in return for the same amount of treasury offering from Naver offering.

The deal would give Naver a 7.85 percent stake in CJ Logistics and 5 percent stake in CJ ENM. CJ Logistics and CJ ENM would own 0.64 percent and 0.32 percent in Naver, respectively.

CJ ENM shares rose 0.54 percent and Studio Dragon 0.64 percent while CJ Logistics fell 1.83 percent on Tuesday. Naver gained 0.71 percent.

CJ and Naver have also teamed up to create a digital content platform, agreeing to invest a combined 300 billion won in K-contents over the next three years.

Under the agreement, CJ ENM and Studio Dragon would own the rights to produce movie and TV adaptations of Naver’s webtoons and webnovels, with an aim to market them to a global audience.

Naver Webtoon has been showing explosive growth, with active monthly users recently topping 67 million. Webtoons and webnovels are contents with vast growth potential as they can create a host of derivative works such as movies, dramas and games.

CJ ENM and Studio Dragon have a strong track record, with an array of smash hits to their name including the Oscar-winning “Parasite” and the blockbuster TV series “Guardian: The Lonely and Great God.”

The companies are aiming to make TVING, the online streaming media platform demerged from CN ENM, the country’s leading over-the-top service to compete against the likes of Netflix and other streaming multinationals. Naver plans to take up an equity stake in TVING and promote the contents by leveraging its own social media platform Line, which is widely used in Japan and Southeast Asia.

In ecommerce and logistics, CJ Logistics and Naver will expand the scope of their e-fulfillment business and make joint investments to upgrade their logistics infrastructure. The companies plan to streamline their warehousing system by adopting digital technologies such as demand forecasting, automation, inventory optimization, autonomous driving and robotics.

By Lee Dong-in, Kim Hyo-hye, Kang Young-woon and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]