TOKYO – SoftBank Group is racing to create a “super app” in Japan following a delayed merger between affiliate Z Holdings and popular messaging app Line.
The merger, which closed Monday, will create a tech giant with more than 100 million users across messaging, online advertising and financial services. The original target in October 2020 was pushed back due to a pandemic-related delay in the regulatory consent process.
Under the new structure, the SoftBank Corp. SoftBank Corp. unit has 50% Line. and South Korean Naver – now renamed A Holdings – which owns 65.3% of Z Holdings. Z Holdings will remain listed on the Tokyo stock exchange and will own Line and Yahoo Japan, which runs a popular news site in Japan. It had a market capitalization of 5.06 trillion yen ($ 47.5 billion) as of Monday morning.
Viewers monitor how the unified entity streamlines cross-cutting services such as online news and entertainment, as well as integrating financial services offered by a subsidiary SoftBank Group PayPay, which runs a fast-growing mobile payment app in Japan.
“As soon as they can create a sense of unity within the various brands will be crucial,” said Kazunori Ito, an analyst at Morningstar. “Building a more comprehensive ecosystem by enabling services such as finance and purchasing [Z Holdings] to better generate revenue from all users. “
Successful integration will threaten U.S. tech giants like Google, Amazon and Facebook in Japan, as well as local e-commerce juggernaut Rakuten. For SoftBank, it is also important to create another silver cow in Japan.
SoftBank’s telecommunications business in Japan has been a steady profit generator for years, but there is a new wave of price cuts due to pressure from Prime Minister Yoshihide Suga’s administration. Rakuten has also entered the competition by launching its own mobile network last year.
“Speed is crucial, as the licensing process delayed Rakuten developing its mobile business,” Ito said.
The merger will also allow Z Holdings to tap three Asian markets overseas where Line is popular: Taiwan, Thailand and Indonesia. Due to a licensing agreement, Z Holdings was able to use the Yahoo brand within Japan, in general.