TOKYO: Japan’s SoftBank plans to merge internet unit Yahoo Japan with messaging app operator Line Corp to create a US$30 billion tech giant, as it bags struggling internet companies to bulk up against rivals like Rakuten.
The telco in a statement said Yahoo Japan, which last month changed its name to Z Holdings, will merge with Line, owned by South Korea’s Naver, in a deal to be completed in October 2020, report agencies.The companies aim for a definitive agreement by next month in a transaction that will see SoftBank and Naver form a 50:50 venture that will control Z Holdings, which will in turn operate Yahoo Japan and Line.
SoftBank and Naver, which owns 73 per cent of money-losing Line, plan to launch a tender offer for Line’s remaining shares at 5,200 yen each - a 13.4 per cent premium to the shares’ price before news of the merger broke. Line’s shares were up 2.6 per cent at 5,180 yen in early Tokyo trade on Monday.
Line has been looking for growth through expansion into areas such as QR code payments with Line Pay, but has been squeezed because of its limited funds and heavy-spending peers including SoftBank, which has a rival service called PayPay. The merger deal is the latest example of consolidation in Japan’s technology industry. SoftBank this month completed its acquisition of online fashion retailer Zozo, whose founder and ex-chief executive Yusaku Maezawa sold down his stake following a series of missteps.