SoftBank and Naver will create a joint business where each will hold 50%. The new company will compete with global companies in Japan and operate both Line and Z Holdings (Yahoo Japan’s operator).
Japanese multinational conglomerate holding company SoftBank has announced its decision to unite its search engine Yahoo Japan with a popular chatting app Line owned by Naver Corp. Within the agreement, Yahoo Japan and Line will merge and create a joint business to develop new opportunities for protecting themselves against competitors.
According to the announcement, SoftBank and Naver will each hold 50% of a new holding company that will operate both Line and Z Holdings (Yahoo Japan’s operator). Currently, Naver owns 72,6% of Line shares, but the companies will but out the rest at a price of $47,78 per share, which is 13,4% higher than the market value before the announcement about the upcoming merger. Each company is planning to spend 170 billion yen ($1.56 billion) on this bid.
The deal that requires shareholders’ approval is set to be completed by October 2020. Line co-CEO Takeshi Idezaw said:
“The internet industry often operates on the winner-takes-all principle and the strong only get stronger. Even combined, our market capital, business scale and R&D expenditures are dwarfed by the global tech giants.”
SoftBank commented:
“In the Internet market, overseas companies, especially those based in the United States and China, are overwhelmingly dominant, and even when comparing the size of operations, there is currently a big difference between such overseas companies and those in other Asian countries, other than China.”
SoftBank and Naver believe that when merged, they will be able to gain a competitive advantage in a rivalry with such players as NTT Docomo and Rakuten. Besides, the new joint venture will compete against global companies in Japan such as Google and Amazon in the sphere of online-advertisement and electronic business.
Kentaro Kawabe, CEO of Z Holdings, stated:
“We want to become an AI tech company that leads the world from Japan.”
Hopefully, the deal will be successful and bring the companies to the new development level.
Line is a Japanese subsidiary of the South Korean internet search giant Naver Corporation and one of the most popular messaging apps with about 80 million users in Japan and a similar number in Southeast Asia and Taiwan.
It is notable that in 2018, Line became the first messenger to launch its own cryptocurrency LINK and its first blockchain network LINK Chain, striving to build up a wide range of businesses using the company’s popular messaging app as a platform.
In September, Line rolled out a crypto trading platform Bitmax to make it easy even for beginners to gain valuable experience at cryptocurrency trading. Initially, Bitmax allowed users to trade five types of cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), XRP, Bitcoin Cash (BCH), and Litecoin (LTC).
As for Yahoo Japan, it is the biggest search engine in the country originally formed as a joint venture between the American internet company Yahoo! and the Japanese SoftBank. It is involved in e-commerce and has online banking subsidiaries. Since 2018, Yahoo Japan is no longer linked to the US Yahoo, as it sold its remaining stake in the company for roughly $4.3 billion.
This year, Yahoo Japan entered the crypto industry. In March, the company announced its plans to launch Taotao exchange. On May 25, the exchange started accepting clients, offering them to trade Bitcoin and Ethereum and enter leveraged positions for such cryptos as XRP, BCH, and LTC.
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