Namco to Merger with Sega?

Namco to Merger with Sega?

Japanese game software maker Namco Ltd have announce it had proposed a merger with fellow game software developer Sega Corp (which is already in merger talks with Sammy Corp). A Namco-Sega merger, if realised, would create Japan's largest game software company with annual sales of 350 billion yen ($2.9 billion).

A Namco spokesman said it had already approached Sega but details had not been worked out. He declined to comment on Sega's response, and Sega officials were not immediately available for comment.

The size would provide a competitive edge in the fiercely competitive but shrinking Japanese game software market. Sega's talks with Sammy, Japan's biggest maker of pinball-style "pachinko" game machines, have been given a thumbs-down by investors, who pushed the shares of both companies to record lows after the announcement in February.

The Asian Wall Street Journal reported last month that both Microsoft Corp MSFT.O and U.S. game maker Electronic Arts Inc ERTS.O were considering "white knight" bids for Sega. Japanese financial daily Nihon Keizai Shimbun said on Thursday that Namco had proposed a merger to take effect early next year, with Sega remaining as the surviving entity.

A merger with Sega would enable Namco to consolidate facilities maintenance and distribution networks and strengthen game software development capabilities, the paper said.

SOURCE: Reuters