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"Bandai to Buy Namco for $1.7 Billion in Cash, Stock (Update3)
May 2 (Bloomberg) -- Bandai Co., creator of ``The Power Rangers,'' agreed to buy ``Pac-Man'' designer Namco Ltd. for about 175.3 billion yen ($1.7 billion) in cash and stock to create Japan's second-biggest toy and video-game software maker.
Bandai purchased 6.3 percent of Namco for 10.5 billion yen in cash, according to a joint statement released today. Namco shareholders will then receive 1 share each in a new combined company per Namco share, valuing their stock at 1,597.5 yen a share, about 14 percent higher than April 28's close.
The merged company will have more funds to develop video games for the $20 billion global market, matching increased spending by larger rival Sega Sammy Holdings Inc., formed in a merger seven months ago, and U.S. companies such as Microsoft Corp. A wider range of characters will also help the new company spur sales of toys, arcade games and cell-phone downloads.
``It's positive because they can complement each other's weakness,'' said Ryoji Nagaoka, an equity strategist at SMBC Friend Securities Co. ``Bandai has abundant characters but is behind in terms of technology. Namco has graphic technology to develop games for game centers but has no outstanding characters apart from Pac-Man.''
The Tokyo-based companies will combine Sept. 29 under the name Namco Bandai Holdings Inc., which will be led by Bandai President Takeo Takasu and Namco Vice Chairman Kyushiro Takagi. Bandai, which also owns characters such as ``Digimon'' and ``Mobile Suit Gundam,'' and Namco, which makes the ``Tekken'' martial arts fighting series, will meet the press at 4 p.m."
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