The purpose of this study is to analyze the case of Kakao’s acquisition of Loen Entertainment(hereafter, Loen) from a financial perspective. Specifically, this study examines the appropriateness of the acquisition price, the acquisition financing, the debt refinancing, and the stock price movement of Kakao and Loen surrounding the acquisition. The results are summarized as follows. Kakao announced the acquisition of 76.4% of Loen’s shares for 1.87 trillion Won on January 11, 2016. The main motive for the acquisition was to create a synergy effect by combining Kakao’s mobile platforms and music contents of Loen. However, the market suspected whether the acquisition price was overvalued because the Loen’s stock price increased more than five times in two and half years since Affinity Equity Partners" acquisition of Loen from SK Planet in 2013. Moreover, Kakao paid additional 23% as an acquisition premium. In addition, the market threw doubt on the Kakao"s ability to finance the acquisition fund. Kakao paid 754 billion Won by issuing new shares through a third-party allocation to Affinity Equity Partners and SK Planet. The remainder of the acquisition price was paid in cash including the bridge loan of 800 billion Won for 6 months at 2.37% interest as well as Kakao"s cash holdings of about 300 billion Won. And then Kakao successfully refinanced the bridge loan of 800 billion Won by issuing the exchangeable bond and the convertible bond at a coupon rate of 0% as well as the corporate bond at a coupon rate of around 2%. Loen showed good performance since the acquisition by Kakao. Sales of Loen increased steeply and Loen achieved an operating income of 100 billion Won for the first time in 2017. However, the stock price of Loen was considerably lower than the acquisition price per share until midyear of 2017. After that, the stock price of Loen rose temporarily reflecting its financial performance, but dropped again after the 1st quarter of 2018. Meanwhile, Kakao’s stock price dropped constantly through the year of 2016 due to the market"s worries about the overvalued acquisition price and Kakao’s financing ability. Later, reflecting for successful refinancing of the bridge loan and expectation for the synergy effect, the stock price of Kakao went up to its previous level before the acquisition. However, since Kakao’s stock price is related to its diversified area of business, it is hard to tell how much the acquisition of Loen contributes to the stock price of Kakao. Even though Kakao tried to strengthen the synergy effect between Kakao and Loen, the results fell short of expectations. In an effort to maximize to the synergy effect, Kakao changed the company name of Loen to ‘Kakao M’ and then merged ‘Kakao M’ on September 1, 2018. There is much attention towards tangible outcomes of synergy effect after the merger.