SoftBank-owned Z Holdings, the operator of search engine Yahoo Japan, is in discussions to merge with instant messaging app Line, a move set to create a wider tech group spanning from financial services and ecommerce, among others.
Photo credit: Line HR Blog
Z Holdings, which recently changed its name from Yahoo Japan, confirmed that talks regarding the merger are already underway, though nothing is final. SoftBank, which owns 44% of Z Holdings, also confirmed the said discussions, Reuters reported.
Line, which sold a majority stake in its mobile unit to SoftBank last year, also said in a statement that it is considering ways to strengthen its corporate value, but indicated that no plans are concrete.
Sources previously told Reuters that the deal could see SoftBank and South Korean internet powerhouse Naver (Line’s parent company) setting up a 50/50 joint venture that would control Z Holdings, which would then hold Line and Yahoo. The two companies are likely to reach a basic agreement by the end of November, according to the sources.
If the deal materializes, SoftBank would bolster its presence in the internet and smartphone landscape, gaining access to the user base of Japan’s biggest messaging app.
According to data from Statista, Line had a peak of roughly 82 million monthly active users in the country during Q3 2019. Though it is Japan’s most popular messaging app, ahead of Facebook and KakaoTalk, Line has been struggling to gain new users.
The messaging firm recently made moves to expand its mobile money transfer and payment offerings. Its digital wallet, Line Pay, began adding support for WeChat Pay in August. The integration allows WeChat Pay users to scan Japanese Line Pay merchant QR codes and pay with their WeChat Pay balance.
Line Pay announced a tie-up with global payments company Visa to develop new financial services for their collective user base as well. The two companies also announced plans to develop blockchain-enabled services that would enable business-to-business and cross-border payments, as well as alternative currency deals.
Editing by Charmaine de Lazo
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