In the midst of comprehensive pressure from the Japanese government and private sector,
CEO Choi Soo-yeon engages in one-on-one negotiations
Interpretation of Naver’s stake evaluation begins, ‘Naver and SoftBank CEOs have sat at the negotiation table to discuss the sale of Line Yahoo stake. The CEOs of both companies have initiated one-on-one negotiations. There is speculation that Naver handing over Line Yahoo stake is essentially an internal reorganization.’,
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, ‘According to the IT industry on the 10th, Naver CEO Choi Soo-yeon and SoftBank CEO Junichi Miyakawa recently engaged in one-on-one negotiations regarding the sale of Line Yahoo stake. CEO Miyakawa stated at a previous earnings press conference, “We met yesterday as well to reach a conclusion by today, but we have not reached one yet.” He also mentioned that they both have the mindset of “let’s resolve this issue” in CEO-level discussions.’,
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, ‘The negotiations between the two CEOs are seen as moving beyond the stage of Naver either giving up or keeping its stake, amidst increasing pressure from the Japanese government, Line Yahoo, and SoftBank. Considering the situation where pressure on stake sales is intensifying, there is a high possibility of discussions between SoftBank and Naver on how much of their stake to offer under what conditions. In relation to this, CEO Miyakawa also stated, “We are discussing adjusting relations with Naver,” and he revealed, “We are open to various possibilities ranging from acquiring an additional 1% to 100%.” Naver responded by saying they are “currently in discussion,” keeping their response extremely vague.’,
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, ‘The battle over how much stake to hand over appears to be increasingly challenging. This is because the profits and losses for both parties vary greatly depending on how the stake is evaluated. Based on the closing price on the 9th, Line Yahoo’s stock price was recorded at 362.6 yen. Considering Naver’s entire stake is worth about 8 trillion won, if they were to hand it all over, SoftBank would need to receive around 8 trillion won. While SoftBank acknowledges that “reaching a conclusion is not easy,” they have stated their intention to finalize it by early July, the deadline for the Japanese government’s regulatory review.’,
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, ‘It is also being assessed that the business relationship between Naver and SoftBank may not be recoverable. The two companies began “half management” from 2019 onwards. In 2019, they decided to integrate the management of Line and Yahoo Japan, establishing A Holdings and Z Holdings in 2021 for this purpose.’,
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, ‘Some analysis suggests that SoftBank may have envisioned taking full control of Line’s management since the time they embarked on business integration. At that time, Masayoshi Son, the chairman of SoftBank Group, who was monopolizing iPhone supply in Japan, took notice of Line and proposed a joint venture. At that time, Line was a coveted killer application in the platform business expansion focused SoftBank Group, with activities such as expanding mobile payment services and acquiring online commerce companies.’,
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, ‘Line is seen as a valuable asset to potentially reverse the group’s current predicament. After consecutive investment failures, SoftBank Group incurred a net loss of 170.8 billion yen (approximately 1.5 trillion won) in the 2021 fiscal year, following a net loss of 97.02 billion yen (approximately 850 billion won) in the 2022 fiscal year. Moreover, with a drive towards artificial intelligence as a future growth area, they are eyeing the data secured through Line.’,
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, ‘It seems that even if Naver completely withdraws from Line, independent operation is still feasible. Since most of the development is done by local staff in Japan and infrastructure management outsourced to Naver can be supported by SoftBank. SoftBank provides enterprise and distribution solutions and cloud services for corporate clients. Professor Lee Chang-beom from Dongguk University Graduate School of International Information Security stated, “As Naver has mainly operated centering around data centers, it is likely that technological independence is not impossible.”‘,
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, ‘Experts attribute SoftBank’s unabashed ambition to the hidden support of the Japanese government. The Japanese government took the lead in pressuring stake sales through administrative guidance. However, when it came to determining the stake structure, it suddenly stepped back, naturally passing the baton to Line Yahoo and SoftBank. This implies that according to a well-devised script from the beginning, the public and private sectors are moving as one.’,
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, ‘Professor Yuji Hosaka from Sejong University’s College of Liberal Arts, an expert on Japan, stated, “The Japanese government is utilizing the Line issue for its political interests,” and assessed, “This intention of the government is something companies cannot ignore, and from SoftBank’s perspective, gaining control of Line’s management means immense profits.”‘,
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, ‘Analysts suggest that the scandal involving political funds caused a plunge in approval ratings for Japan’s ruling Liberal Democratic Party, and they are now looking to turn the tide by linking the Line issue to national security concerns. This, coupled with a national sentiment that views platforms as public assets tied to national security rather than solely as private sector property, has further escalated tensions. The recent tension between the U.S. and China over data sovereignty issues has also influenced the situation.’,
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, ‘Professor Lee Chang-beom remarked, “If Naver does not sell its stake, the government can stoke security-related anxieties or act to distance local Line partners,” and diagnosed, “It is clear that Naver is facing a difficult situation.” Meanwhile, the South Korean government continues to remain passive, stating that it will intervene only if requested by Naver. Ultimately, faced with comprehensive pressure from the Japanese government and private sector, Naver seems to be standing alone. There are opinions suggesting that it may already be too late for intervention. Professor Kim Hyun-kyung from the Seoul University of Science and Technology’s IT Policy Graduate School emphasized, “Not only in Korea but also in countries around the world, there are movements to intervene in companies that have expanded overseas due to national data issues. This should not be viewed simply as a business issue between companies but as an issue between nations.”‘,
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