Naver and SoftBank will form a joint venture that will become the majority shareholder of Z Holdings that run Yahoo Japan as part of the two tech giants' business integration plan.
The South Korean internet giant and the Japanese tech conglomerate said they have signed a basic agreement for the move and will sign the main contract within the year.
Last week, Nikkei reported that the two companies were planning to combine chat app company Line -- which Naver owns with 73% of shares -- with Yahoo Japan, whose parent company Z Holdings is 45% owned by SoftBank.
Under the proposed deal, Naver and SoftBank will own 50% each of the new joint venture, they said.
Tokyo-based Line will be reorganised to be under Z Holdings. Remaining shares of the chat company not owned by Naver will be bought by the two through a tender offer.
If they fail to purchase all the shares, they will consolidate their stocks to own Line and delist it from the Tokyo Stock Exchange. Then they will move SoftBank's share of Z Holdings to Line.
Once the move is concluded, Z Holdings will effectively run Line, Yahoo Japan, Yahoo Shopping, ZOZO, and Japan Net Bank. The move will secure "Japan and Asia's largest user base" and create synergy to compete against global platform businesses, the pair said.
Naver and SoftBank will apply artificial intelligence in the future to continue growth in financial technology through the integration, they said.
Chat app Line boasts 82 million users worldwide and Yahoo Japan 50 million.
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