SoftBank's Yahoo Japan in merger talks with Line, shares jump
By Sam Nussey and Chris Gallagher TOKYO (Reuters) - SoftBank's Yahoo Japan is in talks to merge with messaging app operator Line Corp to create a $27 billion tech giant and help the Japanese conglomerate expand e-commerce and payments services.
By Sam Nussey and Chris Gallagher
TOKYO (Reuters) - SoftBank's Yahoo Japan is in talks to merge with messaging app operator Line Corp to create a $27 billion tech giant and help the Japanese conglomerate expand e-commerce and payments services.
Yahoo Japan, which last month changed its name to Z Holdings, said on Thursday discussions were underway with Line but nothing had been decided. SoftBank Corp, which owns almost half of Z Holdings, also acknowledged the talks.
Shares in Z Holdings, which had a stock market value of about $17 billion at Wednesday's close, jumped 17%. Shares in Line, which is valued at about $10 billion, closed up 15%.
Sources told Reuters on Wednesday a deal was likely by month-end and could see SoftBank Corp and Line's parent Naver Corp form a 50/50 venture that would control Z Holdings, which would in turn operate Line and Yahoo.
Line said in a statement it was considering ways to improve its corporate value but nothing had been decided.
A deal would bring together the operators of two of Japan's biggest QR code payment apps, as the country belatedly shifts to cashless payments. SoftBank's PayPay recently hit 19 million users through aggressive marketing, while Line Pay can tap the 82 million Japanese users of the Line app.
Those services are money-losing, with Line - which last year sold a majority stake in its mobile unit to SoftBank - reporting three consecutive quarters of operating losses as it tries to jump-start growth.
While the two companies combined revenues would exceed rival Rakuten Inc, whose shares fell 6% on the news, their combined transaction value would still be dwarfed by Rakuten, Goldman Sachs analyst Masaru Sugiyama wrote in a note.
SoftBank is making a major push into online retailing, launching PayPay Mall, as it tries to grow revenues outside its core telecoms business.
Seperately on Thursday, Z Holdings said it had acquired 50.1% of fashion e-tailer Zozo Inc in a $3.7 billion deal announced in September, as it bulks up against rivals such as Amazon.com.
The deal leaves Zozo founder and former CEO Yusaku Maezawa as the second largest shareholder with an 18% stake.
Dealmaking by SoftBank Corp, controlled by tech conglomerate SoftBank Group Corp, comes despite the weak performance of the 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.
(Reporting by Chris Gallagher, Noriyuki Hirata and Sam Nussey; Editing by Lincoln Feast and Mark Potter)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.