Yahoo operator, Line eye merger agreement as early as Monday

TOKYO (The Japan News/ANN) - The operator of Yahoo Japan, Z Holdings Corp. (ZHD), is set to reach a merger agreement with free messaging app provider Line Corp. as early as Monday.

The operator of Yahoo Japan, Z Holdings Corp. (ZHD), is set to reach a merger agreement with free messaging app provider Line Corp. as early as Monday, The Yomiuri Shimbun has learned.
 The two companies agreed in negotiations to complete merger procedures within 2020, according to sources. They plan to continue their separate smartphone payment services — PayPay and Line Pay — for the time being rather than integrate them.
 The two companies are expected to hold a press conference soon after reaching the merger deal.
 In their negotiations, they agreed on a basic policy of retaining separate smartphone payment services in order to utilize their respective brand power, but intend to streamline services through unifying systems, sharing stores and introducing a system for mutual remittance. Both companies see their smartphone payment business as a future growth area.
 Line Pay has about 37 million registered users, while PayPay, offered by Yahoo Japan Corp. and SoftBank, has about 19 million. The companies have been competing fiercely over the payment services, including by launching large-scale campaigns offering reward points to shoppers. The competition has been described as a “war of attrition” that prioritizes gaining users over profits.
 As a result, both companies’ smartphone payment businesses are in the red. They intend to streamline operations through the business tie-up and restructure the services to enable reasonable revenue.
 The companies also plan to enable the direct use of Yahoo’s online shopping and auction sites from the Line free messaging app.
 Line is thought to have the most users among messaging apps in Japan. The prospective merger gives Yahoo the chance to connect these users to its own businesses.
 ZHD President Kentaro Kawabe and Line President Takeshi Idezawa have held a series of meetings on the merger and agree on the need to establish a force capable of countering overseas information technology giants such as Google LLC.
 Masayoshi Son, chairman of ZHD parent SoftBank Group Corp., also supports the merger.

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