This article is from WeChat public account:Investment (ID:pedaily2012), author: Shirley, from the cover: Oriental IC

Building a Japanese version of Alibaba, was put on the agenda by Sun Zhengyi.

According to Reuters news on November 18, Softbank plans to have its Internet subsidiary Yahoo Japan (now renamed Z Holdings) and South Korea Naver The company’s messaging software Line merged. The two sides plan to sign a final agreement in December this year and complete the merger by October 2020.

This move will create Japan’s largest Internet service group, covering approximately 100 million Japanese users, with operations in the areas of search, e-commerce, and mobile payments.

In this regard, Softbank does not hide its ambitions, saying that it aims to establish a business group that can resist fierce competition at home and around the world. After the merger, the company will save 100 billion yen (artificial intelligence) =”Remarks”> (about RMB 6.4 billion) R&D investment.

Yahoo+Line equals a $30 billion tech giant?

For this “marriage” between Yahoo and Line, Softbank may have been thinking for a long time.

Since June this year, the two companies have been discussing alliances and reached a merger intention in August. Yahoo Japan changed its name to Z Holdings last month, and the actual controller behind it is Softbank; Naver is Korea’s largest search engine operator, currentlyHolds 72.64% of the shares in Line.

According to “Nihon Keizai Shimbun”, the merger was initiated by Z Holdings to N Line, the parent company of Line.

According to the statement by both parties, Z Holdings’ parent company Softbank and LINE parent company Korea NAVER will each contribute 170 billion yen ($1.56 billion) The offer for the remaining shares of Line was made at a price of 5,200 yen per share, and LINE plans to delist the market.

After privatization, Softbank and NAVER will each contribute 50% to establish a joint venture that holds a 70% stake in Z Holdings and operates Yahoo Japan and Line.

What kind of spark will Yahoo Japan and Line combine? As the most popular chat application in Japan, Line is equivalent to the Japanese version of WeChat, with 82 million monthly active users, ranking first in market share, covering advertising, e-commerce, communication payment, AI and other business segments, 2018, Line Sales reached $1.9 billion (about 13.314 billion yuan).

And Yahoo Japan is Japan’s largest portal, mainly engaged in advertising, e-commerce, financial services, etc., with 50 million users, last year’s revenue of 954.7 billion yen (about 61.523 billion yuan).

It is not difficult to find that the two sides overlapped in the payment and e-commerce field, and the two sides had a fierce confrontation. Last year, in order to seize the opportunities in the field of mobile payment, and to win over customers, the two launched a vast subsidy war, but the result was “killing one thousand, self-destruction eight hundred.”

There are joints and divisions, and the two can work together to expand resources and expand the scale. With the huge flow of Line, it will help Yahoo’s e-commerce business to further develop. In terms of payment, the two can also form synergies. By then, the two sides will create a technology giant with a size of 30 billion US dollars.

It is worth mentioning that after the news of the merger of the two sides, on November 14, Z Holdings shares rose 16.93% from the previous day; Line rose 15.38%.

This may be a chance for Softbank to turn over

The Japanese media merged the two parties: “Sun Justice wants to build an Alibaba in Japan.”

The performance of Softbank has not been satisfactory for the past six months. The successive losses in the investment of Uber, a network car service provider, and WeWork, a shared office giant, have caused Softbank to suffer huge losses, which has also caused Sun Zhengyi to be controversial.

These questions are more directly reflected in the earnings report. Softbank’s second quarter report for the 2019 fiscal year announced earlier this month showed that during the reporting period (July-September), it was dragged down by its vision fund, Softbank For the first time in 14 years, a quarterly loss was recorded, with a loss of 704.4 billion yen (about 6.5 billion US dollars), a profit of 706 billion days in the same period last year. yuan.

And its $100 billion vision fund has an operating loss of $8.9 billion. In the face of such an embarrassing performance, Sun Zhengyi could not hide his disappointment. “Like the typhoon crossing, this is a loss that I have never had since I started my business.”

What’s even worse is that the investment setbacks that Softbank has suffered in succession will be affected by the second fund. In July of this year, Softbank announced the launch of the second “Vision Fund”, “Vision Fund 2” This article is from WeChat public account:Investment sector (ID: pedaily2012) , Author: Shirley