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They turned to the creation of a $30 billion tech giant Yahoo Japan’s Line Corp deal

TOKYO (Reuters) – SoftBank Corp’s plan to merge with the internet, a subsidiary of Yahoo Japan using a messaging app operator Line Corp to create a $30 billion tech group, as it strives to be better, to be able to compete with a local rival, Rakuten, and AMERICAN tech powerhouses.

FILE PHOTO: The logo of SoftBank Group, Corp, is displayed at SoftBank World in 2017 conference to be held in Tokyo, Japan, on July 20, 2017. (REUTERS photo/Issei Kato/File Photo

The deal, which would combine the operators of two of japan’s top QR code payment services, which gives Yahoo Japan and has access to the 164 million internet users, and data in Japan and South-east Asia, as they turned, it extends out to the outside of the core wireless business.

It also indicates the loss of Line, a deep-pocketed patron of the arts, which may make its technical expertise, it is also possible, through the Vision of the company.

The deal comes as the SoftBank Group’s founder, Masayoshi Son, fighting to restore his reputation after an ill-fated investment in the office-sharing firm WeWork.

Telecommunications company SoftBank Corp. said Yahoo Japan, which last month changed its name to Z’s Holdings Corp. (a) would be to make a merger with the Line, owned by South Korea’s Naver Corp, is in October 2020.

The companies intend to reach a final agreement by the next month, under which SoftBank Corp. and Naver will form a 50:50 venture should have his Holdings, which, in turn, would work with Yahoo Japan to the Line.

SoftBank Corp and Naver, which owns 73% from the Line, there is a plan to launch a tender offer for the Line’s remaining shares of 5,200 euro each, a 13.4% premium to the price before the news of the merger broke up. Values the Line at about $12 billion.

Line, the shares closed up 2.2% at 5,150 yen after the announcement. The shares in its Holdings, which rose by 1.2%, and Naver’s shares are up 2.9%, and SoftBank Corp. ‘ s 0.3%.

The line is looking to grow by expanding into areas such as a QR code) payments in a Line to Pay, but has repressed because of the limited resources and the heavy expenditure of their peers, including SoftBank, which has a rival service called PayPay.

CLOSER LINKS COULD BE ESTABLISHED

The merger of the world’s most popular messaging app and is one of the top online retailers in the recent consolidation in the tech industry, as Rakuten is expanding in SoftBank’s core business with the launch of its mobile services.

Yahoo in Japan, and this month completed its acquisition of online fashion retailer Zozo Inc., whose founder and former Chief Executive of Yusaku Maezawa, sold its stake following a series of missteps.

The merger is being driven by the two companies’ “sense of crisis” about the rise and rise of tech giants from the US and China, the Line to the CEO This Idezawa, told a press conference that the wearing of a tie-in with Yahoo Japan, red is the corporate color.

SoftBank Group, the Son often complained Japan’s sluggishness in emerging areas such as artificial intelligence, on Monday, the presentation will show, even when the combination of the company’s research and development budget, it would be eclipsed by foreign rivals.

Yahoo Japan’s CEO Kentaro Kawabe, who is wearing a tie that is in Line with the corporate green, declined to comment on what services might be combined or eliminated post-merger. Kawabe and Idezawa will serve as Ceo after the merger.

The line has been launched in order to overcome the cases of networks, in the aftermath of the 2011 earthquake and tsunami, prior to the building of a strong following, with the use of colored emojis, finally stating in 2016.

However, the messaging service in an effort to make the deposits in those countries are dominated by apps like Facebook’s WhatsApp, and will eventually be retrenched in its key markets of Japan, Taiwan, Thailand, and Indonesia.

FILE PHOTO: The logo of the Line and Corp’s is on display at the head office in Tokyo, Japan, Jan. 25, 2017. (REUTERS photo/Toru Hanai/File Photo

At a time of heightened political tension between Japan and the republic of Korea, the merger of the two countries in the economic partnership of the past decade, Jaewoong Lee, a Korean serial entrepreneur and co-founder of Naver and rival Daum have written on his Facebook page late on Sunday.

Z Holdings, which will remain a consolidated subsidiary of SoftBank Corp., which is a unit of investment conglomerate SoftBank Group, Corp.

SoftBank was advised by Mizuho Securities, a unit of Mizuho Financial Group, while on Naver, it was advised by Deutsche Bank.

Report by Sam Nussey; Additional reporting by Ju-min Park in Seoul; Editing by Christopher Cushing/Mark Potter/Jane Merriman

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