Sega Corp. and pachinko machine maker Sammy Corp. announced Thursday that they will merge on Oct. 1, a move seen aimed at resolving Sega’s financial troubles.
Sammy President Hajime Satomi will assume the top post at the new company, while the designation of Sega President Hideki Sato is yet to be decided, they said.
“As one of the top slot and pachinko machine makers, Sammy has been aiming to become a comprehensive entertainment firm,” Satomi told a snap news conference. “With Sega’s game content development capabilities and its operational (knowledge) of amusement facilities, (Sammy) can establish a presence as a new entertainment firm in the global market.”
Yet, many specifics of the deal, which was approved the same day by both firms’ boards, haven’t been ironed out, including the merger structure and equity-swap ratio.
Officials said the details should be agreed upon by May so that the agreement can be presented for official endorsement at regular shareholders’ meetings in June.
Satomi noted he was in favor of keeping the Sega name, saying they plan to “globally expand the Sega brand.”
The presidents of both companies said the merger negotiations were completed within two weeks. “We met and discussed the deal almost everyday,” Satomi said.
Sammy, listed on the first section of the Tokyo Stock Exchange, is one of the largest suppliers of slot and pachinko machines. It posted consolidated sales of 164.29 billion yen for fiscal 2001.
While the officials emphasized the companies are approaching the merger as equals, the announcement is largely seen as a move to prop up embattled Sega.
Sega has been hit by disappointing sales in its consumer game software division since it pulled the plug on its Dreamcast game console, which failed to catch on with consumers.
“Our biggest problem is in the consumer (game) business,” said Sega’s Sato. “We have to review from scratch our business strategy and cost structure.”
Earlier in the day, Sega announced the downward revision of its earnings forecast for the fiscal 2002.
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