Naver's Choice After Receiving Request to Sell Line Yahoo Shares

Line Yahoo Sale Could Trigger Major Global Business Shift
Possibility of Losing Southeast Asia Market
Partial Sale as Final Scenario
SoftBank's Statement Is Key

As Line Yahoo publicly requested the sale of its shares to Naver, Naver has been busy seeking countermeasures. Various prospects are being suggested in the market, including the option of selling part of Line Yahoo's shares and receiving technology license fees.

According to the IT industry on the 9th, Naver reportedly convened an executive meeting around the time of Line Yahoo's earnings announcement the previous day to discuss various countermeasures, including the share sale plan.

Line Yahoo announced on the 8th that it requested Naver to purchase shares of its parent company, A Holdings. This is the first time Line Yahoo has formalized the sale of Naver's shares. During the earnings conference call, Take Idezawa, CEO of Line Yahoo, mentioned the administrative guidance from Japan's Ministry of Internal Affairs and Communications, stating, "Under comprehensive judgment, we are strongly requesting the entrusted party (Naver) to change the capital relationship." For now, SoftBank securing a majority stake is the direction Line Yahoo desires. Currently, A Holdings, established with equal investment from Naver and SoftBank at 50% each, holds 64.5% of Line Yahoo.

Naver has not reached a clear conclusion. The company maintains its previous stance of "deciding on the sale of shares based on mid- to long-term strategy," keeping various possibilities open.

From Naver's perspective, it is difficult to easily hand over shares. Even selling part of the shares would inevitably require a major change in its global business strategy. Line is a global messenger with over 200 million users not only in Japan but also in Taiwan, Thailand, and Indonesia. Centered on the messenger, it has focused on the Southeast Asian market by linking services such as simple payment, delivery, and webtoons. Losing control over Line could mean losing not only the Japanese market but the entire Southeast Asian market. If other Southeast Asian countries attempt to operate Line directly through domestic companies, the Japanese case could serve as a precedent. It is known that such concerns are also present within Naver.

The option of succumbing to pressure to sell some shares is mentioned as a last-resort scenario. The fact that Shin Jun-ho, Chief Product Officer (CPO), stepped down as an inside director of Line Yahoo is interpreted as Naver's reluctance to sell shares.

If Naver ultimately sells shares, it will step down to become the second-largest shareholder while maintaining ties with Line Yahoo. The value of Naver's shares in Line Yahoo exceeds 8 trillion won. Adding the management premium, it is expected to surpass 10 trillion won. There are also forecasts that Naver will negotiate to receive additional compensation beyond the share value when transferring part of the shares. Since the Line messenger was created with Naver's technology and know-how, Naver may demand an annual technology license fee.

What remains is SoftBank's announcement. SoftBank is scheduled to announce its earnings at 4 p.m. that day. Junichi Miyakawa, CEO of SoftBank, will make the announcement. Idezawa said, "SoftBank Chairman Masayoshi Son is taking this situation very seriously," and added, "The major shareholders, SoftBank and Naver, are in consultation." If SoftBank also officially expresses its intention to acquire additional shares, Naver's position will become even narrower.

Attention is also focused on the response of the South Korean government and political circles. Criticism is growing domestically as the government has not taken significant measures regarding Japan's takeover of Line. On the previous day, Lee Jong-ho, Minister of Science and ICT, stated, "The Ministry of Science and ICT's top priority is to ensure that our companies do not suffer disadvantages when investing or doing business overseas," adding, "We respect Naver's decision and will be considerate, and if there are diplomatic issues, we will actively communicate with relevant ministries to resolve them."

This content was produced with the assistance of AI translation services.