SoftBank's Z Holdings and Line eyeing merger - sources (updated)
13/11/2019 15:58
(Updates sourcing, adds possible structure of deal)
By Noriyuki Hirata and Sam Nussey
Tokyo, Nov 13 (Reuters) - SoftBank's Z Holdings Corp
4689.T is in talks to merge with messaging app operator Line
Corp 3938.T , two sources said on Wednesday, the investment
company's latest bet on a struggling tech firm.
A deal could see SoftBank Corp 9434.T , which controls
internet firm Z Holdings, and Line's parent Naver Corp
035420.KS form a 50:50 venture that would control Z Holdings,
which would in turn operate Line and Yahoo, the sources said.
The two parties were likely to reach a basic agreement by
the end of the month, the sources said.
Naver was not immediately available for comment outside of
business hours. SoftBank said nothing had been decided.
The talks were first reported by Kyodo news agency.
Line, which last year sold a majority stake in its mobile
unit to SoftBank, has reported three consecutive quarters of
operating losses as the company tries to jump start growth.
Z Holdings, formerly known as Yahoo Japan, made a move in
September to take control of fashion e-tailer Zozo Inc 3092.T
in a $3.7 billion deal, as it bulks up against rivals like
Amazon.com AMZN.O . urn:newsml:reuters.com:*:nL3N26243X
Dealmaking by SoftBank Corp, controlled by tech conglomerate
SoftBank Group Corp 9984.T , comes despite weak performance of
its technology bets of its parent, which recorded an $8.9
billion operating loss in the second quarter.
The group's first quarterly loss in 14 years followed a
collapse in the value of its investment in office-sharing firm
WeWork as investors have turned sceptical about the path to
profitability at cash burning startups. urn:newsml:reuters.com:*:nL3N27M1PO
(Additional reporting by Munsif Vengattil in Bengaluru; Editing
by Maju Samuel and Edmund Blair)
((sam.nussey@tr.com; https://twitter.com/SamNusseyRTRS;
+81345632760;))