SEGA Merger Update - Decision Between Sammy and Namco To Come Soon

A recent article written by Japanese website Asahi details the current state of SEGA, Namco and Sammy, and a possible merger with the former hardware giant and house of Sonic. Quite interestingly, this is turning out to be some kind of love triangle, tiffs included and all.

To catch you up: it was announced in February that SEGA would be merging with pachinko company Sammy, with the deal all due to be wrapped up in May. Then, it turned out Namco had been talking with SEGA about the same thing since last year, and had publicly come out about a merger in mid-April. In response, SEGA announced it was "carefully" considering its options, a statement that clearly took Sammy by surprise.

A decision from SEGA is due early May, but things have become a little frosty from Sammy's perspective. According to Asahi (via interpretation from Cube-Europe), Sammy President Hajime Satomi and the late CSK founder and former SEGA chairman Isao Okawa were close friends, and had apparently made a handshake agreement on their partnership back in February.

So, "when Sega officials announced last month they were considering a partnership proposal from Namco, Sammy officials were furious... [SEGA president Hideki] Sato met with Satomi shortly after Namco proposed a merger on April 14. When Sato told Satomi about the offer from a third party, it took him completely by surprise."

Quote

"(Sega) has betrayed and embarrassed us," a senior Sammy executive said. "We don't really care (if the deal goes through or not) anymore."

Yet warning signs the partnership could fall through were evident even before Namco's merger plan came to light.

In early March, it was revealed that Sega has received a partnership offer from Electronic Arts Inc., the largest game software maker in the United States.

At the time, Sammy officials repeatedly said there would be no change in their planned integration with Sega.

On the contrary, the plan has largely been put on hold. Sega and Sammy initially planned to work out integration details at the end of March and sign an official agreement in late May.

Sega President Sato blames the delay primarily on the differences in operations between the two firms, with particular regard to the markets they work in and specific business practices.

Such differences, Sato says, have delayed the process of evaluating the assets held by the two firms.

For its part, Namco has urged SEGA to move into partnership with them instead of Sammy, claiming that the two companies share the same goals and work in the same industry. "We have to do something, or Sega will go under," a Namco official was on record as saying. "Namco is Sega's best partner because we are in the same industry."

Apparently SEGA killed talks with Namco just before it announced its merger with Sammy in February, but a senior Namco official said, "Sega has apparently come back to the negotiation table after seeing its stocks fall. We are serious about this and we wouldn't even mind Sega acquiring us."

Interesting times! We'll let you know when SEGA makes a decision, and which way it ends up going.