SoftBank to create $41b tech giant with Yahoo Japan, Line Corp merger , Latest Business News - The New Paper

SoftBank to create $41b tech giant with Yahoo Japan, Line Corp merger

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TOKYO : Japan's SoftBank Corp plans to merge Internet unit Yahoo Japan with messaging app operator Line Corp to create a US$30 billion (S$41 billion) tech giant, as it bags struggling Internet companies to bulk up against rivals like Rakuten Inc.

The telco in a statement said Yahoo Japan, which last month changed its name to Z Holdings Corp, will merge with Line, owned by South Korea's Naver Corp, in a deal to be completed in October 2020.

The companies aim for a definitive agreement by next month in a transaction that will see SoftBank Corp and Naver form a 50-50 venture that will control Z Holdings, which will in turn operate Yahoo Japan and Line.

SoftBank Corp and Naver, which owns 73 per cent of money-losing Line, planned to launch a tender offer for Line's remaining shares at 5,200 yen each (S$65) - 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 yesterday.

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.- REUTERS