SoftBank and Naver Merge Yahoo Japan and Line to Rival US and China Tech Giants
SoftBank Corp. and Naver agree to merge Z Holdings, formerly Yahoo Japan, with messaging app Line to better compete against dominant US and Chinese tech firms. The deal creates a joint holding company equally owned by both parent companies.
SoftBank Corp. reaches an agreement to merge Z Holdings, formerly known as Yahoo Japan, with the popular messaging app Line Corp. SoftBank and Naver, the current owner of Line, each plan to hold a 50% stake in a newly formed holding company that oversees both businesses. The companies expect to finalize this major transaction by October 2020.
This strategic union directly addresses the overwhelming dominance of American and Chinese technology companies in the global internet market. While Line enjoys massive popularity as a messaging app in Japan, Taiwan, and Thailand, it struggles to expand elsewhere despite offering diverse services like Line Pay and Line Music. Similarly, Yahoo Japan faces intense competition from Google in search and from Rakuten and Alibaba in the e-commerce sector.
By combining their resources, SoftBank and Naver aim to accelerate advancements in artificial intelligence, search, advertising, and financial services. The merger involves taking Line private through a tender offer priced at 5,200 yen per share, representing a 13.41% premium over Line's closing price prior to the initial reports. This consolidation allows the newly merged entity to leverage their combined user bases and investment portfolios to build a stronger competitive edge in Asia.