Bandai Co. the toymaker and Namco the games company took the financial steps necessary to merge their two companies together yesterday. Bandai bought 6.3% of Namco for 10.5 billion yen ion cash, valuing that stock at over 14% above its last stock market valuation. The move caused Bandai's share price to fall slightly and saw a marginally larger move in the other direction for Namco's stock, a shift which was that company's largest gain since November, 2003. The two companies will formally merge on the 29th of September, forming a new company under the name Holdings Inc., which will be led by Bandai President Takeo Takasu and Namco Vice Chairman Kyushiro Takagi.

The merged company will have increased funds to compete in the global $20 billion gaming market which will allow them to compete against giants such as Sony, and Sammy Holdings Inc, another company formed out of the merging of two entertainment giants. Bandai currently generates around 20% of its income from and arcade games with Namco pulling in over 60% of its revenue from the same sector. According to Yuuki Sakurai, who helps manage the equivalent of $4.7 billion of Japanese equities at Fukoku Mutual Life Insurance Co, "Merging is one way of surviving in an that is very much nearing maturity, especially in where the birth rate is low. It's unclear whether this merger will remain positive for the companies in the medium to long-term because of the 'difficult' business environment"

By Sam Gibson

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  1. - Unregistered 4 years ago

    Personally, as a life-long Namco fan, I think it is a shame that they will merge shortly because Namco has been a great company for so long. As long as Namco still creates their masterpieces, such as PacMan, Mr. Driller, the entire Namco Tales Series, etc. I think the merger will be a good thing for both the companies. .