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Business Integration Between Naver and SoftBank’s LINE and Yahoo Japan


LINE Corp. (“LINE”), a subsidiary of Naver Corporation (“Naver”) and the largest online messenger company in Japan, and Z Holdings Corporation (“Z Holdings”), a subsidiary of SoftBank Corp. (“SoftBank”) and the owner of Yahoo Japan, a Japanese web portal, signed a business integration agreement on December 23, 2019, and is currently undergoing restructuring for the business integration (the “Business Integration”).
Pursuant to the Business Integration, Naver and SoftBank will each hold 50% stake in a joint venture that will control Z Holdings.  In addition, Z Holdings will have LINE, Yahoo Japan, Yahoo Shopping, ZOZO (a commerce platform) and Japan Net Bank (a financial service provider) under its wing.  Such Business Integration will enable Naver and SoftBank to secure the largest user base not only in Japan but also in Asia and create synergy between themselves.  Consequently, they will establish themselves as new AI-specialized companies that can better compete with global platform operators.
This transaction is a large-scale global project involving four large companies, Naver, SoftBank, LINE and Z Holdings, and an extremely complex process, including merger filing review in four countries including Korea, the United States, Japan and Taiwan; tender offers in Japan and the United States; consolidation of shares and delisting; mergers and spin-offs; and stock swaps.  To ensure the above procedures can be carried out without any issues, legal, accounting and financial advisors from Korea, the United States and Japan devised elaborate plans and reviewed potential issues over a significant period of time.
Kim & Chang provided legal consultation to Naver in relation to the Business Integration, particularly in reviewing the transaction structure, supporting legal due diligence, reviewing relevant agreements and contracts, reviewing disclosures and addressing disclosure obligations, reviewing foreign exchange reporting issues, negotiating in relation to acquisition financing and reviewing the financing documents, and reviewing other issues involving domestic laws and regulations.