Naver and Softbank strike a big deal to push for management integration of their Internet business divisions. Naver is South Korea’s equivalent to Google while Softbank is Japan’s largest conglomerate.
Japanese media, Nikkei, reported on the 13th that Naver’s Japanese subsidiary Line and Japan’s Softbank affiliate Yahoo Japan are pushing for management integration.
Currently, Line has 80 million users in Japan. It is the “national messenger.” It has the same status as Kakao Talk in Korea. And Naver holds about 70 percent shares in Line.
Meanwhile, Yahoo Japan is Japan’s largest portal site. With Z Holdings, a subsidiary of Softbank, as the largest shareholder with a 40 percent stake. Softbank bought Yahoo’s copyright from Yahoo and operates it separately.
In the report by Nikkei, the media said Naver and Softbank have reached many agreements on the management integration of Line and Yahoo Japan. The two companies will invest 50 percent each to set up a holding company. And the company will become the largest shareholder of Z Holdings. Z Holdings will have Line and Yahoo Japan as subsidiaries.
What this deal between Naver and Softbank mean
The media reported that the two companies aim to reach a basic agreement on management integration within this month. Regarding the report, Naver said, “It is true that there are discussions on management integration.”
The management rights of the merged entity were not known in detail. Currently, no one knows as to who would control it and the structure of the stake.
According to the report, Softbank made the management merge rights first. And Naver positively reviewed the proposal.
If Line and Yahoo Japan merges it means that a mobile and PC integrated IT service with more than 100 million users in Japan will emerge.
This is equivalent to an economy of scale that can be on par with global IT companies such as Google, Microsoft and Amazon. In Asian internet markets, this merge has the possibility that it will surpass Google. And become the third-largest Internet company after Tencent and Baidu.
