SoftBank, a Japanese Conglomerate and Naver Corporation, a Technical Industrial South Korean company announced to sign a $ 30 billion merger deal of their subsidiary companies on November 18, 2019.
The merger agreement was taken place between the two Japanese subsidiary companies: Z Holdings, formerly known as Yahoo Japan and Tokyo-based Line Company.
‘Z Holdings’ is the name of the new company and it will be a 50-50 joint venture for parental companies. The merger will be completed in October 2020.
Striving to compete with American & Chinese companies
The merger aims at building a tech company that can stay strong in the competition among internet service providers in the world.
According to SoftBank CEO, Masayoshi Son, the Japanese internet providers have long stayed out of sight in the competition due to its poor policies.
Mr. Son believes that the new company will be able to compete with the rivalries of American and Chinese internet provider companies.
To improve the stronghold of the new company, parental companies focus to develop certain areas of operations including artificial intelligence, telecommunications, and mobile payments.
Win-Win Situation for Both Companies
The news of the merger draws the attention of several investors which results in a growth of 2.2% share in Line and 1.2% in Z Holdings in Tokyo on Monday.
Tokyo-based Line CEO Takeshi Idezawa claims that combining the two companies will expand their customers globally.
Yahoo Japan can now easily access new customers of these countries including Thailand, Taiwan, and Indonesia where the messaging app, Line is popularly used and whereas, Line will achieve its popularity in Tokyo as well.
The combined revenue of $ 11 billion can put a tough challenge against its domestic rival company, Rakuten.
The new company is likely to grow significantly since it can access to large numbers of new customers, especially from South-east Asia.
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