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Softbank has recently announced plans to merge its subsidiary Z Holdings, known formerly as Yahoo Japan, with mobile messaging giant and Whatsapp rival Line to form a Japanese internet juggernaut that would not only be a leader in data and AI, but also be able to compete with some of the world’s largest and richest technology companies, mainly in the United States and China.

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The alliance between the two Japanese companies is estimated to be worth $30 billion and is expected to be concluded by October next year. The merger’s combined revenue could see it totalling $11 billion, easily surpassing its domestic competitor Rakuten.

Tech analysts have lauded the merger, stating that this agreement would give Z Holdings and Line the opportunity to extend their reach towards a larger consumer base and increased negotiating power with its advertisers. Softbank and Naver, which owns Line, will each control 50% of the share in Z holdings.

“We were driven by a sense of crisis about global competition and the pace of change in AI,” said Takeshi Idezawa, co-Chief Executive at Line. “The timing arrived for us to move on to the next phase [with this merger].”

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