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December 09, 2019

Naver shares soar on Line-Yahoo Japan merger talks

PUBLISHED : November 14, 2019 - 15:52

UPDATED : November 15, 2019 - 00:24

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South Korean internet giant Naver’s shares soared 13 percent on Nov. 14 following news that its messenger app Line is mulling a merger with SoftBank-owned Yahoo! Japan.

Japan’s media reports earlier said that SoftBank and Naver are considering to form a 50:50 venture that would control Z Holdings, which in turn will operate Line and Yahoo! Japan.

On Nov. 14, Line, the most popular messenger in Japan, and Z Holdings admitted that they were in talks but nothing has been decided yet.

As investors digest news of the potential new mega online payment platform with more than 100 million users and cooperation between two tech giant in Korea and Japan, shares of Naver and Z Holdings, Yahoo! Japan’s new company name, jumped despite weak stock markets. 



Kospi-listed Naver’s shares rose 12.97 percent to 178,500 won ($152.54) while the benchmark index edged up only 0.42 percent to 2,131.32 points.

In Japan, Z Holdings’s increased 16.93 percent to close at 449 yen ($4.13) and Line’s shares also leaped 15.38 percent to 5,290 yen. SoftBank, which owns more than 50 percent of Z Holdings, inched up 0.28 percent to 4,289 yen.

The surges came although Japanese shares saw a one-week low on the same day. The Nikkei average on the Tokyo Stock Exchange dropped 0.76 percent to 23,141.55 points on Nov. 14.

The prospective combination is seen as the latest bet by Masayoshi Son, chairman and CEO of the holding company SoftBank Group and CEO of SoftBank Mobile, which is making a major push into online retailing and payment.

As part of its efforts, the telecommunication unit launched mobile payment service PayPay in October last year and also acquired 50.1 percent in Zozo, an online fashion retailer for $3.7 billion.

The Line-Yahoo! deal also comes as SoftBank Group recorded a net loss of $65 billion in the third quarter, the first quarterly loss in 14 years, amid tepid performance by some of portfolio startups such as WeWork, a coworking space company for which Son’s Vision Fund invested $10.65 billion.

Analysts forecast that the merged company could threaten rivals in and outside Japan such as Rakuten and Amazon.com. The news pushed down shares of Rakuten, Japan’s leading e-commerce platform, by 6 percent.

The deal could also create synergies. The majority of Yahoo! Japan users are in their 40s while Line is used by teenagers and those in their 20s and 30s.

By Park Ga-young (gypark@heraldcorp.com)

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