Bandai and Namco outline postmerger strategy

Now-united companies plan to combine American subsidiaries, some gaming divisions.

TOKYO--Today Bandai and Namco announced what their preliminary business plans will be after merging into Bandai Namco Holdings on September 29. The two companies revealed that they will also establish a new holdings company in North America to unite their operations there. Other plans include the launch of a new subsidiary that will absorb the two companies' gaming divisions. For the current business year ending March 31, 2006, the two combined companies forecast revenue of 474 billion yen ($4.28 billion) and a profit of 24.4 billion yen ($220 million). Revenue for the business year ending March 31, 2008, is targeted at 550 billion yen ($4.97 billion).

Bandai and Namco's merger will do more than unify the toy and game manufacturer. While Bandai is known as Japan's largest toy company, it also deals with other products, including games, anime, and Internet content. Although relatively unknown, Namco also operates various businesses outside of games. Its most successful non-gaming business is the Italian Tomato restaurant chain, a popular franchise that can be found throughout Japan.

To effectively control their numerous businesses to promote synergy, Bandai and Namco will be reorganizing their operations and subsidiaries into six units: toy and hobby, amusement facilities, game content, network, movie and audio content, and affiliated businesses.

In terms of games, Bandai and Namco will establish a new subsidiary named Bandai Namco Games by April 1, 2006. It will absorb the two companies' gaming divisions and consist of 60 developers from Bandai and 1,300 developers from Namco. Bandai's staff is considerably smaller than Namco's because Bandai outsources its game development, while Namco develops in-house. However, two Bandai game subsidiaries, Banpresto and BEC, will not be absorbed into Bandai Namco Games. All three will be managed by Bandai Namco Holdings' game-content sector.

Bandai and Namco will also merge their operations in America. The two companies will establish Bandai Namco Holdings USA in January 2006, which will manage all six American subsidiaries. By improving efficiency, the two companies said they plan to increase their overseas revenue for the current business year by 19 percent and are targeting to raise it by 50 percent in the future.

Today's announcement did not contain any major changes to Bandai Namco Holdings' board of directors. Bandai president Takeo Takasu will become the president and representative director of Bandai Namco Holdings, while Namco vice chairman Kyushiro Takagi will become chairman and director.

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