South Korean and Japanese tech giants will team up to create one of the biggest internet companies in Asia by October of next year as the Japan-South Korea trade war continues to escalate and Koreans continue to boycott Japanese goods indefinitely.
South Korea’s Naver Corp, owner of messaging app-giant Line, will merge with Yahoo Japan and create a $30 billion tech-communications titan in East Asia and Southeast Asia. Yahoo Japan is owned by Tokyo-based telecom Softbank Corp.
The merger could represent the biggest economic partnership between the two rival nations in ten years, and a significant step to improving relations that have deteriorated dramatically with both sides instituting trade sanctions on each other this year and striking each other off of their fast-track trading partner lists.
Analysts believe this corporate partnership between the two countries can possibly begin to thaw the icy economic relationship that has escalated dramatically this past year.
“This is perhaps the most significant case of economic cooperation between Korea and Japan in the last decade,” said Jaewoong Lee, founder of South Korean tech-giant Daum, in a Facebook post over the weekend.
“They will become the No. 1 Internet company in Japan as well as Southeast Asia,” he added. “There are many things that the two companies can do together, such as portal, messenger, commerce, and simple payment. Never had a good relationship between Korea and Japan ever since.”
The South Korea-Japan trade war started last year when the South Korean Supreme Court ordered Japanese corporations to pay reparations for their involvement in slave labor on the Korean Peninsula during its occupation in 1910 to 1945.
The Japanese government claims the Korean court ruling comes in direct conflict with a 1965 treaty between the two countries that explicitly stated all war time compensation claims were “completely and finally” settled.