Sega looks to Namco to avoid merger with Sammy
By Mariko Sanchanta in Tokyo
Published: April 20 2003 22:18 | Last Updated: April 20 2003 22:18
http://news.ft.com/servlet/ContentS...d=1048313896315
Sega's search for a white knight to quash its planned merger with Sammy, a maker of pachinko slot machines, has been realised with Namco, the Japanese games software maker, proposing a merger with the embattled games company.
The news last week sent Sega's shares soaring 15.7 per cent to close at Y736 on Thursday, although some of this was retraced on Friday when shares closed at Y710. Sega's shares have shed nearly 30 per cent since it said in February it would merge its operations with Sammy, in a move widely seen as a takeover of Sega by the pachinko company.
It is understood that CSK, a Japanese information services company and Sega's leading shareholder with a 22 per cent stake, initially pushed for the merger with Sammy in an effort to boost Sega's flagging sales and profitability.
Sega this year slashed its annual group net profit forecast by 90 per cent to Y500m ($4m) from a previous estimate of Y5bn, blaming a protracted sales slump of its games software in the US.
"At this point, CSK's priority is Sega's share price - it doesn't matter who the partner is," said Shunji Yamashina, games analyst at Morgan Stanley in Tokyo. "Almost all of Sega's employees prefer a merger with Namco over Sammy, particularly those in Sega's research and development division."
Sega, famous for its "Sonic the Hedgehog" character and once a leading console maker, was set to merge operations with Sammy in October.
The company said on Thursday that it had received Namco's merger proposal and was studying it.
Sammy said on Thursday it had not received news of the proposed merger scheme with Namco prior to the announcement and that it would discuss the matter with Sega in due course. It is unclear whether there would be a break-up fee for the merger but analysts said it seemed unlikely.
A Namco-Sega combination would create a company with annual sales of about Y358bn. The merger reflects a trend toward consolidation in the fragmented games sector, which was hit by a 13 per cent drop in domestic sales in the first half of last year, due to higher costs associated with the launch of new formats.
Sega and Namco formed an alliance two years ago, when both companies agreed to develop games jointly for arcade centres.
well, if this is true. all i can say is hmm...fuck. i hope no one from Sega does anything but make games.
Namco should not give its name up for anyone. that would be the lamest shit ever.
any traditional Ridge Racer game sequals must be made by Namco only. same goes for any other games that Namco has developed.
anyways, i have no choice but to try and only think of the positive things from here on out.
ok, one thing is for sure, Sega's games can only get better because of this.
i can't wait for wednesday to come already.
anyways, anyone know what the deal with this source is?
EDIT: crap, sorry, the link is down. sorry everyone :sweat:
