SoftBank signs $30b deal between Yahoo Japan and Line

Japan's Z Holdings, formerly Yahoo Japan, will merge with mobile chat app operator Line, the firms said Monday, in a bid to boost the customer base for their digital services.

Mobile operator SoftBank Corp, the parent of Z Holdings (ZHD), and South Korea's Naver, Line's parent company, agreed the merger of ZHD and Line, SoftBank and Naver said in a joint statement.

Line will be delisted after SoftBank and Naver make a tender offer, with the merger expected to happen in October 2020.

The decision "aims to bring together the business resources of the ZHD Group and the LINE Group, which have overwhelming user bases and abundant assets in Japan, to provide a convenient experience to users in Japan," the statement said.

SoftBank also plans to invest in expanding into new business areas and "aims to be a leading company that is a driving force across Japan, Asia and worldwide".

The merger "will be conducted on an equal basis by ZHD and LINE with the aim of forming a business group that can overcome fierce domestic and global competition" and the newly integrated company will implement "business investment targeting growth in the areas of AI, commerce, Fintech, advertising" among others, it said.

The final price for the tender offer is still under discussion.

SoftBank Corp. a mobile unit of telecom and investment giant SoftBank Group, holds a 44-percent stake in Z Holdings, while Line is controlled by Naver.

Line was launched in 2011 after Japan's quake-tsunami disaster damaged telecoms infrastructure.

It combines features from Facebook, Skype and WhatsApp with games and a mobile payment service.

SoftBank and Line have increasingly competed in fields such as digital payments, while both firms have also been investing in artificial intelligence to improve their services.

Shares in SoftBank Corp were trading down 0.46 percent at 1,501 yen and its parent SoftBank Group was up 0.82 percent at 4,295 yen in early trade.

Shares in ZHD were up 1.43 percent at 423 yen and Line trading up 2.57 percent at 5,179 yen.

Tokyo stocks closed higher on Monday, led by gains in the semiconductor sector, with investors watching the forex market and USChina trade talks.

The benchmark Nikkei 225 index rose 0.49 percent, or 113.44 points, to 23,416.76, while the broader Topix index added 0.24 percent, or 4.05 points, to 1,700.72.

"Chip-related shares led today's gains on expectations of growing demand," Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP.

Investors were also encouraged by the solid finishes of US shares last week, with many hoping for progress in the US-China trade talks.

But profit-taking emerged at the top side of the Nikkei index, which finished last week at a 13-month high.

"Investors are noticing heavy upside as the Nikkei approaches the mid-range of the 23,000-yen level," Okasan Online Securities said in a note to clients.

Investors are also eyeing the dollar, which stood at 108.82 yen in Asian afternoon trade, effectively maintaining its ground since Friday in New York, where it fetched 108.78 yen.

Tokyo shares will benefit if it remains stable at the current high level, dealers said.

Investors generally expect, as technical charts suggest, that the Nikkei should have room to climb towards the year end.

In Tokyo, the semiconductor sector rose sharply as Advantest surged 3.66 percent to 5,650 yen with Tokyo Electron up 1.82 percent at 23,160 yen.

Popular messaging app Line jumped 2.18 percent to 5,150 after the firm said it will merge with the operator of Yahoo Japan, called Z Holdings, a SoftBank Group company.

SoftBank Group rallied 1.64 percent to 4,330 yen, while Z Holdings added 1.19 percent to 422 yen.