SoftBank to create $30bn tech giant through merger

Kentaro Kawabe, CEO and president of Z Holdings, and Takeshi Idezawa, CEO and president of LINE, shake hands ahead of a planned merger. (AFP)
Updated 19 November 2019

SoftBank to create $30bn tech giant through merger

  • Deal signals SoftBank move into services outside its core wireless business

TOKYO: SoftBank Corp. plans to merge Internet subsidiary Yahoo Japan with messaging app operator Line Corp. to create a $30 billion tech group, as it strives to compete more effectively with local rival Rakuten and US tech powerhouses.

The deal, which would combine the providers of two of Japan’s top QR code payment services, offers Yahoo Japan access to 164 million Line users and their data in Japan and Southeast Asia as SoftBank expands into services outside its core wireless business.

It also gives loss-making Line a deep-pocketed patron who can offer its tech expertise, including potentially via the Vision Fund.

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

SoftBank Corp. said Yahoo Japan, which last month changed its name to Z Holdings Corp, would aim to complete its merger with Line, owned by South Korea’s Naver Corp. , in October 2020.

HIGHLIGHTS

● SoftBank, Naver to form 50:50 joint venture.

● Joint venture will control Yahoo Japan, Line.

● Plan tender offer for Line shares.

The companies plan to reach a definitive agreement by next month under which SoftBank Corp. and Naver will form a 50:50 venture that would control Z Holdings, which in turn would operate Yahoo Japan and Line.

SoftBank Corp. and Naver, which owns 73 percent of Line, plan to launch a tender offer for Line’s remaining shares at 5,200 yen each — a 13.4 percent premium to the price before news of the merger broke. That values Line at about $12 billion.

Line has been looking for growth through expansion into areas such as QR code payments with Line Pay, but has been squeezed because of its limited funds and heavy-spending peers including SoftBank, which has a rival service called PayPay.

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

Yahoo Japan this month completed its acquisition of online fashion retailer Zozo Inc, whose founder Yusaku Maezawa sold down his stake following missteps.


IMF experts visit Lebanon amid worsening economic crisis

Updated 2 min 52 sec ago

IMF experts visit Lebanon amid worsening economic crisis

  • IMF team will provide broad technical advice
  • Lebanon has not requested IMF financial assistance

BEIRUT: A team of IMF experts met Prime Minister Hassan Diab on Thursday at the start of a visit to provide Lebanon with advice on tackling a deepening financial and economic crisis, an official Lebanese source said.

The IMF has said the team will visit until Feb. 23 and provide broad technical advice. Lebanon has not requested financial assistance from the Fund.

The long-brewing economic crisis spiraled last year as capital flows into the country slowed and protests erupted against the ruling elite over decades of corruption and bad governance.

Diab’s government, which took office last month, must decide what to do about upcoming debt payments, notably a $1.2 billion dollar-denominated sovereign bond due on March 9.

One of Lebanon’s most influential politicians, Parliament Speaker Nabih Berri, said on Wednesday that debt restructuring was the best solution for looming maturities.

Lebanon will on Friday review proposals from firms bidding to give it financial and legal advice on its options, a source familiar with the matter said on Thursday. The government aims to take a quick decision on who to appoint, the source said.

So far, firms bidding to be Lebanon’s legal adviser are Dechert, Cleary Gottlieb, and White and Case, the source said.

Lebanon has issued requests for proposals to seven firms to provide it with financial advice.

The government on Wednesday formed a committee tasked with preparing an economic recovery plan that includes ministers, government officials, a central bank representative and economists, according to a copy of a decree seen by Reuters.