SoftBank's Yahoo Japan, Line Corp announce merger

SoftBank's Yahoo Japan, Line Corp announce merger

SoftBank Group Corp (Photo by Reuters)

Japanese telco SoftBank Corp announced on Monday plans to merge its internet unit Yahoo Japan with messaging app operator Line Corp, as it scoops up struggling internet companies to bulk up against rivals such as Rakuten.

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

SoftBank Corp is a unit of investment behemoth SoftBank Group Corp.

SoftBank Corp and Naver, which owns 73% of money-losing Line, plan to launch a tender offer for Line's remaining shares at 5,200 yen per share, a 13.4% premium to the share price before news of the merger broke. Line's shares were up 2.6% at 5,180 yen in early trading on Monday.

Z Holdings will continue to be a consolidated subsidiary of SoftBank. It will hold a press conference with Line at 0800 GMT.