Japan’s SoftBank Corp is set to merge its internet unit Yahoo Japan with messaging app operator Line Corp in a plan to create a $30 billion tech giant. SoftBank is currently merging with struggling companies to stick up to other tech rivals, such as Rakuten Inc.
A statement was issued saying that Yahoo Japan (recently updated to Z Holdings Corp) will merge with South Korea’s Naver Corp Line in a deal to be finalized in October of next year.
SoftBank Corp and Naver are set to meet for a definitive deal next month to agree on a 50:50 venture to control Z Holdings in the operation of Yahoo Japan and Line.
Naver, which owns 73% of money-losing Line, had plans with SoftBank Corp to launch a tender offer for the remaining shares of Line to be priced at 5,200 yen each before news of the merger broke.
On Monday, Line’s shares increased 2.6%, or 5,180 yen each during the early hours of Tokyo trade.
Line had plans of creating QR code payments with Line Pay in a venture for growth and expansion. However, the plans were vacated due to limited funds and heavy-spending peers like SoftBank.
The merger of Yahoo Japan and Line is the latest venture of consolidation in Japan’s tech industry. This month, SoftBank also finalized the acquisition to online fashion retailer Zozo Inc, which was sold when founder and ex-Chief Executive Yusaku Maezawa committed a series of missteps.
Following the intensifying political conflict between Japan and South Korea, the tech merger might be the most significant economic cooperation in over 10 years between the two countries, according to South Korean entrepreneur and founder of Naver, Jaewoong Lee.
Z Holdings will remain a consolidated subsidiary of SoftBank Corp. Line and Z Holdings are set to hold a news conference for the merger.