SoftBank on Monday announced plans to merge its internet unit Yahoo Japan with messaging app operator Line.
SoftBank said in a statement that Yahoo Japan, which last month changed its name to Z Holdings, will merge with Line in a deal to be completed by October 2020.
SoftBank plans to merge internet subsidiary Yahoo Japan with messaging app operator Line Corp to create a $30 billion tech group, as it strives to compete more effectively with local rival Rakuten and U.S. tech powerhouses.
The deal, which would combine the providers of two of Japan’s QR code payment services, offers Yahoo Japan access to 164 million Line users and their data in Japan and Southeast Asia as SoftBank expands into services outside its core wireless business.
It gives loss-making Line a deep-pocketed patron who can offer its tech expertise, including potentially via the Vision Fund.
The deal comes as SoftBank Group founder Masayoshi Son battles to restore his reputation after an ill-fated investment in office-sharing firm WeWork.
Telecoms firm SoftBank said Yahoo Japan, which last month changed its name to Z Holdings Corp, would aim to complete its merger with Line, owned by South Korea’s Naver Corp, in October 2020.
The companies plan to reach a definitive agreement by next month under which SoftBank and Naver will form a 50:50 venture that would control Z Holdings, which in turn would operate Yahoo Japan and Line.
SoftBank and Naver, which owns 73 percent of Line, plan to launch a tender offer for Line’s remaining shares at 5,200 yen each – a 13.4 percent premium to the price before news of the merger broke. That values Line at about $12 billion.
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.