SoftBank To Merge Yahoo Japan And Line Messenger For AI Edge
Zacks Investment Research | Nov 17, 2019 09:08PM ET
In a concerted effort to augment its AI capabilities, SoftBank Group Corp. (OTC:SFTBY) recently unveiled plans to merge its Yahoo (NASDAQ:AABA) Japan Internet business with messaging service provider LINE Corporation (NYSE:LN) . The deal will create a $30 billion tech behemoth in a deal that is likely to be completed in October 2020.
Yahoo Japan, which had renamed itself Z Holdings Corp last month, aims to ink a definitive agreement with Naver Corp. that owns the majority share in Line, by the end of 2019 to form 50:50 joint venture (JV) firm. This JV will then control Z Holdings with Yahoo Japan and Line as wholly owned subsidiaries.
The transaction, subject to mandatory closing conditions and shareholder approvals, will help both Softbank and Line to pool their resources for gaining a strong foothold in the AI domain. The companies had traditionally been competitors in digital payments business. The merger is likely to create synergistic benefits to help the new company better compete against rivals.
Yahoo Japan had once been the leading search engine of the country with a dominant position in web portal and e-commerce business. However, it gradually lost its place as users migrated from PCs to smartphones and emergence of online shopping platform of Rakuten, Inc. (OTC:RKUNY) and Amazon.com, Inc. (NASDAQ:AMZN) . Nevertheless, Yahoo Japan still boasts about 48 million daily active users across its portfolio of more than 100 mobile phone apps.
Line is a prime messenger service provider in Taiwan and Thailand with 21 million and 45 million customers, respectively. The company is focusing to develop a lineup of AI-powered hardware products, including speakers and earphones, to gain more access to the younger generation. The merger with Yahoo Japan is likely to provide a significant boost in this endeavor.
The transaction marks a major consolidation in the technology industry and comes at a time of heightened political tension between Japan and South Korea. Whether the deal will help to improve the strained relationship between the two countries remains to be seen.
SoftBank currently has a Zacks Rank #5 (Strong Sell).
You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.