Anime publisher Kadokawa Corp. and Nico Nico Douga video portal provider Dwango Co. said Wednesday that they will merge operations on Oct. 1.
“We aim to establish the world’s leading platform for content, which would serve as a new business model in the Internet age,” Kadokawa adviser Tatsuo Sato told a news conference in Tokyo. He said the merger would combine Dwango’s technical strength and online platform experience with Kadokawa’s record of producing best-selling books, movies and animation titles.
The new holding company will be named Kadokawa Dwango Corp. Kadokawa shares will be exchanged for 1.168 common shares in the new company and Dwango shares will be swapped one for one.
Kadokawa and Dwango plan to delist from the Tokyo Stock Exchange on Sept. 26 and to launch shares in the new company on Oct. 1.
Dwango Chairman Nobuo Kawakami will become its chairman, while Sato is set to take the post of president.
The two companies formed a capital alliance in 2011. As of the end of March this year, Kadokawa held a 12.23 stake in Dwango, while Dwango owned 2.49 percent of Kadokawa. The tie-up led to them cooperating mainly on e-books.
Kadokawa, established in 1945, is one of Japan’s largest publishers, with a catalog that comprises literature, dictionaries and entertainment magazines, and a movie business that includes the production of live-action motion pictures and anime. The company posted a group net profit of ¥7.59 billion on sales of ¥151.15 billion in the fiscal year that ended in March.
There were 2 million paid and 36 million unpaid members of the Nico Nico Douga video service as of September 2013, which hosts user-generated content such as live cellphone video from disaster sites and press conferences by politicians.
The company also distributes music and game applications for mobile devices. Dwango posted a group net profit of ¥2.27 billion on sales of ¥35.95 billion in the fiscal year that ended last September.
Both Kadokawa and Dwango shares rose on the Tokyo Stock Exchange on the reports of the two companies’ merger. Kadokawa closed at ¥3,465, up 10 percent, while Dwango ended the day at ¥2,798, up 9.04 percent.
Buy orders started to jump soon after the market started for the day, and the two issues stayed at elevated levels during the afternoon.