Photo: Sun Zhengyi, CEO of Softbank group

Netease technology news on November 18, according to foreign media reports, Japan's Softbank group plans to merge its Yahoo Japan Internet business with instant messaging service line to expand its online influence and build a global giant in the field of artificial intelligence (AI).

In the complex deal, Softbank Corp, Softbank group's telecoms arm, and naver, line's South Korean parent, will first privatise line through a takeover offer estimated at 5200 yen a share. Z Holdings (formerly Yahoo Japan), a subsidiary of Softbank, will then merge with line in October 2020. The final result of the tender offer is still under discussion and the current Mou is not binding.

Softbank holds about 44% of Z holdings, while line is controlled by naver. Z holdings and naver plan to invest 170 billion yen ($1.56 billion) each in joint ventures. The offer is a 13% premium to line's share price before the news of the talks, which was valued at $11.5 billion.

Softbank and line are increasingly competing in areas such as digital payments, and working together could save them huge subsidies and other expenses. The two companies have also been investing in AI to improve their services. People familiar with the matter said earlier that line started negotiations this summer and is looking for new partnerships to compete with U.S. and Chinese rivals in the field of AI.

The statement said the two companies had been negotiating a possible alliance since June and had identified the idea of a merger in August. After the privatisation of line, Softbank and naver will be restructured and eventually each will own 50% of the new company. Yahoo Japan and line will be wholly owned subsidiaries of the combined entity.

On Monday, line shares rose 3.2% on the Tokyo Stock Exchange, while Z holdings rose 5%. (small)

Source: Netease Technology Report

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