Tokyo (Reuters) - SoftBank's Z Holdings Corp 4689.T is in talks to merge with messaging app operator Line Corp 3938.T, two sources said on Wednesday, the investment company's latest bet on a struggling tech firm.
A deal could see SoftBank Corp 9434.T, which controls internet firm Z Holdings, and Line's parent Naver Corp 035420.KS form a 50:50 venture that would control Z Holdings, which would in turn operate Line and Yahoo, the sources said.
The two parties were likely to reach a basic agreement by the end of the month, the sources said.
Naver was not immediately available for comment outside of business hours. SoftBank said nothing had been decided.
The talks were first reported by Kyodo news agency.
Line, which last year sold a majority stake in its mobile unit to SoftBank, has reported three consecutive quarters of operating losses as the company tries to jump start growth.
Dealmaking by SoftBank Corp, controlled by tech conglomerate SoftBank Group Corp 9984.T, comes despite weak performance of its technology bets of its parent, which recorded an $8.9 billion operating loss in the second quarter.
The group’s first quarterly loss in 14 years followed a collapse in the value of its investment in office-sharing firm WeWork as investors have turned skeptical about the path to profitability at cash burning startups.
Additional reporting by Munsif Vengattil in Bengaluru; Editing by Maju Samuel and Edmund Blair
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