TOKYO — Internet portal Yahoo Japan Corp. and chat app Line said Monday they have reached a basic agreement to merge in a deal that includes buying out Line Corp.’s minority shareholders.
Under the merger terms, a SoftBank Group Corp. 9984, +1.27% subsidiary and Line parent Naver Corp. 035420, +0.58% of South Korea will each hold 50% of a joint-venture company that in turn will control a holding company housing the operations of Yahoo Japan 4689, +1.92% and Line LN, -4.94% . Media, including The Wall Street Journal, reported last week that the 50-50 arrangement was being studied.
The companies said they aimed to leverage each other’s large user bases to expand their online businesses, which include shopping and payment services as well as advertising-supported content. Line is the dominant chat app in Japan and says it has 82 million active monthly users.
The parties to the deal said they hoped to reach a final agreement next month. They said it would require various clearances from authorities.
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