Line, Yahoo Japan in merger talks

SEOUL, Nov. 15 (UPI) -- Messaging app Line is in talks to merge with Yahoo Japan, the two companies said.

Line is held by Korea's Internet giant Naver, while Yahoo Japan is owned by Japanese telecom firm SoftBank.

Both companies acknowledged that discussions were underway for the prospective union, which would be valued around $27 billion. But they said nothing had been decided.

SoftBank controls Z Holdings, which is valued about $17 billion and owns Yahoo Japan, while Line has a stock market value of about $10 billion.

SoftBank and Naver are reportedly mulling over forming a 50-50 venture that would control Z Holdings, which would in turn run Line and Yahoo Japan.

The union would bring about a mega-size online payment platform with more than 100 million users to challenge competitors like Amazon, Tencent and Rakuten.

Line runs one of the most popular messaging apps in Japan, with more than 80 million users. It also operates other services, including Line Pay and Line Tax.

With more than 50 million users, Yahoo Japan is a dominant web portal in the world's third-largest economy.

Investors positively regarded the merger talks as shares in Z Holdings soared 17 percent on Thursday, while those of Line also jumped 15 percent. In comparison, Rakuten lost 6 percent.

The upcoming deal is seen as the latest maneuver of SoftBank chief Masayoshi Son, who has worked to make inroads into online retail and payment services.

The news also came at a time when SoftBank Group netted a loss of $65 billion during the July-September period, its first quarterly deficit in 14 years.

Naver was founded by Lee Hae-jin, who still exerts great influence on the search engine even after he stepped down from the company's board in early 2018.

Son is a Korean-Japanese businessman who created SoftBank in 1981.