Sega to merge with Sammy, creating Japan's biggest game software firm
TOKYO, May 18, 2004 (AFX-ASIA via COMTEX) -- Sega Corp, a major video game and amusement arcade equipment maker, said it will merge in October with Sammy Corp, a leading maker of "pachinko" slot machines, creating Japan's biggest game software company.
The merged entity will have projected annual sales of more than 400 bln yen.
Both companies are listed on the First Section of the Tokyo Stock Exchange.
"We decided (at a board meeting) today to merge with Sammy under a holding company. The holding company will be established on Oct 1. That's all we can say now," said Masato Suzuki, a company spokesman.
Suzuki said the two companies will hold a joint news conference later today to explain details of the planned merger.
The Nihon Keizai Shimbun reported in its evening edition, citing unidentified sources familiar with the matter, that Sega and Sammy were at an advanced stage of negotiating a merger.
"Since we have some 22 pct stake of Sega Corp, it's true we have been discussing our business direction going forward, including a tie-up or something," said Tetsuya Hasegawa, Sammy's spokesman.
He declined to comment further on the matter.
Sammy became the largest shareholder in Sega by acquiring a 22.4 pct stake last December from CSK Corp, a data processing company.
The merger is intended to counter intensifying competition worldwide by combining Sammy's financial strength with Sega's software development capability, the newspaper said.
Sammy President Hajime Satomi will likely be named chief executive of the holding company, the report said.
Sammy's consolidated sales are estimated to have jumped 51 pct to 251 bln yen in the year to March. Sega's sales are estimated to have declined 4 pct to 190 bln yen as its home-use game business continued to struggle, the newspaper said.
According to the merger plan, profits made through Sammy's pachinko pinball and other game machine business will be plowed back into the game operations to actively market machines for commercial use and other products in Asia, Latin America and other promising overseas markets, the report added.