Sega gets go-ahead for merger
Sega's and Sammy's stockholders give a thumbs-up in the final decision toward the merger in October.
TOKYO--Sega gained acceptance in its general stockholders meeting today for the company to merge its business operations with Sammy. Sega and Sammy announced in mid-May that they will be merging operations in October by becoming subsidiaries of a new holding company, Sega Sammy Holdings. Both companies required that their shareholders accept the merger before it took place. Since Sammy's shareholders had already approved the merger during its stockholders meeting on the 25th, the two companies will be combining operations as originally planned. Once merged, Sega's and Sammy's combined annual income for the fiscal year 2005 is expected to be at 501 billion yen ($4.4 billion), making it one of the biggest game companies in Japan.
Sega's and Sammy's stock will be withdrawn from the Tokyo Stock Exchange on September 27, prior to the launch of Sega Sammy Holdings on October 1. Under the terms of the merger, each share of Sammy will be swapped for one share of Sega Sammy Holdings, while each share of Sega will be swapped for 0.28 shares of Sega Sammy Holdings. That means the deal will give current Sammy shareholders control of nearly three-quarters of the new company's voting stock.
In preparation for the merger, Sega is merging its seven game studio subsidiaries--Sega Wow, Sega AM2, Hitmaker, Sonic Team, Smilebit, Amusement Vision, and Digitalrex--back into the company's main branch on July 1. Two studios, Hitmaker and Amusement Vision, have already closed their official Web sites in preparation for the move.
While Sega and Sammy will operate as separate entities at first, plans have been announced for the two companies to unite and be reorganized into four new divisions by March 2007: Pachinko and Pachislot, amusement and consumer games, media content and network, and miscellaneous operations.
Sammy president Hajime Satomi previously commented that Sega's and Sammy's brand names would still continue to be used after the future reorganization of the two companies. Businesses related to the arcade and consumer gaming sector will continue to run under Sega's name, while the Sammy brand will be applied to the Pachinko- and Pachislot-related businesses.