Issue Date: Vol. 43, No. 4 / April 25, 2003 - May 24, 2003 , Posted On: 5/8/2003
Sega Board Kills Merger Plan With Sammy; Namco Tables Offer
TOKYO -- (Posted May 8) It's official: Sega Corp. will not be merging with either Sammy Corp. or Namco Ltd., at least not right away. This is according to announcements made in Japan on Thursday (Wednesday night U.S. time). First, Sega revealed its decision to withdraw from its planned merger with pachinko manufacturer Sammy Corp. The Sega board concluded such a combination would be less beneficial than previously hoped. Also, Sega president Hideki Sato said during a press conference Thursday that Sega and Sammy could not agree on management style and other issues. (Observers had wondered if the Japanese stock market's strongly negative reaction to a possible Sega-Sammy merger would kill the deal in any case.)
Also on Thursday, Sega officials told Namco that Sega was "not in a situation to give a specific answer" to Namco's merger offer at present. Just hours after Sega announced terminating the Sammy deal, Namco announced the withdrawal of its merger offer, saying Sega's stalling made it clear the timing is not right.
However, some uncertainty still surrounds the Sega-Namco merger possibility. Reuters Japan reported -- following the announcement at Thursday's press conference that the Sammy deal was off -- that Sega president Sato stated that Sega still plans to consider a Namco merger. And Namco's subsequent announcement included this statement: "If Sega comes up with a new proposal in the future, we are ready to consider it."
This is the third time in recent years that Sega has announced a merger then killed it. Sega cancelled a planned merger of its U.S. pinball division with Capcom's pinball arm in 1997; later Sega scrapped an overall merger with Japanese toymaker Bandai.