THE JAPAN NEWS



 

TOKYO (Jiji Press) — Yahoo Japan Corp.’s parent, Z Holdings Corp., and free messaging app provider Line Corp. said Monday they have agreed to integrate their business operations in a deal that will create Japan’s biggest internet service group with about 100 million users.

The two sides aim to pass screenings by the Japan Fair Trade Commission so as to complete the deal in October 2020, hoping to compete with overseas information technology giants such as Amazon.com Inc.

The consolidated sales of Z Holdings in fiscal 2018, which ended in March, and Line in the year to December totaled about ¥1,160 billion. The combined figure exceeded the ¥1,100 billion registered by cybermall operator Rakuten Inc. in 2018, taking the top spot among Japanese internet service operators.

Z Holdings and Line said they plan to “make investments to generate growth in new fields,” such as artificial intelligence, e-commerce, fintech and advertising.

By bringing together their management resources, they aim to bolster services in the Japanese market and expand their operations into Asia, and then to the world.

Z Holdings is a subsidiary of SoftBank Corp., the telecommunications arm of Softbank Group Corp.

SoftBank and South Korea’s Naver Corp., which owns Line, will set up a fifty-fifty joint venture that will put Z Holdings under its umbrella. Yahoo Japan and Line will continue their operations as wholly owned subsidiaries of Z Holdings.

SoftBank and Naver will launch a joint tender offer for Line to raise their stake in the company to 100 percent for an estimated total of ¥340 billion. The date of the tender offer has yet to be decided.

After a successful tender offer, Line will be delisted from the Tokyo Stock Exchange.

After the integration is completed, Z Holdings President Kentaro Kawabe will retain his post, while both Kawabe and Line President Takeshi Idezawa will become chief executive officers of Z Holdings.

Yahoo Japan and Line have many overlapping operations, such as smartphone payment and online shopping services. The combined number of users of Yahoo Japan’s PayPay and Line Pay exceeds 50 million.

The FTC plans to examine carefully whether the business integration will hamper fair competition and cause any disadvantages to consumers, informed sources said.

Line, which was set up by Naver in 2000 in Japan, has about 82 million domestic users a month of its free messaging app. It is currently diversifying into new services, such as cashless settlement services.

Z Holdings was set up as a joint venture between former U.S. internet portal Yahoo! Inc. and SoftBank in 1996. It aims to strengthen its financial and internet shopping operations.