Sammy set to complete Sega takeover with full buy-out

Japanese game publisher and gambling machine manufacturer Sammy Corp has announced that it is to acquire the remaining 78 per cent of Sega's stock which it doesn't already own, in a deal worth 165 billion Yen (1.2 billion Euro).

The news follows months of intense speculation over the intentions of Sammy president Hajime Satomi, who had indicated that a number of different options were being considered regarding the future relationship of the two companies after Sammy bought a 22 per cent stake in Sega last December.

Under the terms of the arrangement, Satomi will head up a new holding company which will effect a merger of Sega and Sammy in October by buying up all the shares in both companies - with Sega shareholders being given 0.28 shares in the new company for each share they own, while Sammy shares will be exchanged one for one.

In effect, this completes the merger deal between the two companies which was originally proposed in early 2003 - but was eventually rejected by Sega in an acrimonious and highly public debacle which led to the resignation of several of the publisher's senior executives.

The news of the complete take-over comes after Sega announced that its net income for the year to March 31st had more than doubled, with 8.8 billion Yen (64.5 million Euro) of income recorded, largely due to the continuing upswing in the company's arcade machine business.

Crucially, the loss in the company's home console operations narrowed massively - with a loss of 2.8 billion Yen (20.5 million Euro) recorded, down from 8.6 billion Yen (63 million Euro) last year.

Satomi-san, who will be president of the new merged company, has previously expressed his desire to see Sega focusing increasingly on the arcade market, and hopes to use the company's development talent and wealth of intellectual property to build on the success of Sammy's low-cost Atomiswave arcade system.

The Sega acquisition will also give Sammy a strong base from which to build its overseas operations. The company is currently largely focused on the domestic Japanese market, where it is the single largest supplier of the popular "pachinko" gambling machines found in arcades all around the country.