Messaging app provider Line Corp. and the company controlling Yahoo Japan Corp. are considering merging their operations by the end of 2020, sources familiar with the matter said Saturday.
Yahoo Japan operator Z Holdings Corp., which is a SoftBank Group Corp. holding company, and Line may announce their merger plan as early as next week, the sources said.
SoftBank and Line hope to expand their internet businesses, including online retailing, advertising and mobile phone services, the sources said.
In fiscal 2018, which ended in March, Z Holdings posted group sales of ¥954.7 billion while Line had sales of ¥207.1 billion in the business year ended last December.
Their combined sales would be the largest among the nation's online business operators, surpassing those of e-commerce giant Rakuten Inc.
Line has about 164 million users of its messaging app in Japan, Taiwan and Southeast Asia, while more than 50 million people visit Yahoo Japan's website each month.
The two companies plan to operate their smartphone payment services separately while seeking to improve efficiency and convenience.
Z Holdings' PayPay service has 19 million customers and Line Pay has 37 million.
The companies will consider eventually merging their digital payment businesses, depending on the outcome of an antitrust review, the sources said.
SoftBank and South Korea's Naver Corp., the parent company of Line, are considering merging the units under a new joint company, other sources have said.