Japanese holding company SoftBank Group is once again preparing for a mega transaction that could change the global tech landscape. The company's founder Masayoshi Son is reportedly orchestrating a possible mega-merger between two of Japan's largest internet companies to establish an entity that can take on global competitors such as Google and Facebook.
According to an announcement made by SoftBank Corp on Monday, Masayoshi is now in talks to broker a merger between Z Holdings and Line. Z Holdings, which was formerly known as Yahoo Japan, is a subsidiary of SoftBank Group, while Line is currently one of the country's largest messaging mobile app.
SoftBank claims that the merger would be a big win for the country as it is severely lagging behind other nations such as China and the United States in terms of internet technologies. The company hopes the proposed merger would result in a more competitive entity that can successfully expand into other Asian markets.
The CEOs of both Z Holdings and Line made a joint statement on Monday, explaining the reasoning behind the proposed merger. Z Holdings CEO Kentaro Kawabe and Line CEO Takeshi Idezawa both agreed that the rise of global tech giants such as Google and Facebook are presenting a "crisis" on an international scale.
The executives stated that the industry is currently being dominated by these companies and competing against them would be impossible if it were done by both firms separately. Both CEOs did admit that even when combined, the merged company would be much smaller than the current global leaders. However, standing together, the company will have a much better chance of competing.
Apart from the merger, both Line and Z Holdings are planning to make significant joint investments in advanced technologies such as artificial intelligence (AI). Kawabe stated in the joint statement that AI will likely be the key to the merged company's success in the global stage.
Masayoshi had repeatedly mentioned in the past that AI will be the leading technology in the upcoming technological revolution. As evidence of his belief, SoftBank has invested billions of dollars into companies involved in developing AI technologies.
Following the announcement of the merger negotiations, both companies saw their stock prices surge in Tokyo. Line saw its shares close 2.2 percent higher, while Z Holdings saw a 1.2 percent uptick in Tokyo this week. Based on their current elevated share prices, both companies have a combined market capitalization of around $30 billion.
