{"id":40658,"date":"2024-11-29T17:16:23","date_gmt":"2024-11-29T08:16:23","guid":{"rendered":"https:\/\/automaton-media.com\/en\/?p=40658"},"modified":"2024-11-29T17:16:25","modified_gmt":"2024-11-29T08:16:25","slug":"the-cost-of-buying-out-kadokawa-entirely-could-discourage-sony-from-acquisition-deal-says-japanese-finance-outlet","status":"publish","type":"post","link":"https:\/\/automaton-media.com\/en\/news\/the-cost-of-buying-out-kadokawa-entirely-could-discourage-sony-from-acquisition-deal-says-japanese-finance-outlet\/","title":{"rendered":"The cost of buying out Kadokawa entirely could discourage Sony from acquisition deal, says Japanese finance outlet\u00a0"},"content":{"rendered":"\n

Rumors of Sony Group and Kadokawa Corporation being in the midst of acquisition negotiations surfaced last week. Since then, Kadokawa\u2019s CEO made a statement to officially confirm<\/a> Sony\u2019s buyout interest. In addition, Bloomberg<\/a> has reported that Kadokawa wants Sony to \u201cbuy it entirely or not at all,\u201d while the latter is more interested in \u201cextracting\u201d only assets related to anime and video games. <\/p>\n\n\n\n

However, Japan\u2019s Toyo Keizai<\/a> reports that Sony could face significant obstacles in fully acquiring Kadokawa, a major one being how much it would cost. <\/p>\n\n\n\n

Kadokawa\u2019s current shareholders are Korean IT giant Kakao (9%) and China\u2019s Tencent (7%), which means that there are no major shareholders that could potentially block an acquisition by Sony. However, based on calculations by Macquarie Capital Securities Japan, the deal (in case of a total buyout) is expected to be worth more than 640 billion yen (which is around $4.3 million USD based on recent conversion rates).  <\/p>\n\n\n\n

\"Kadokawa<\/figure>\n\n\n\n

As part of its midterm management plan for 2024 to 2026, Sony Group said it would allocate 1.8 trillion yen<\/a> towards investments and flexible share repurchases. But the company has been spending significantly elsewhere too \u2013 amidst the rising costs of music rights, Sony Music has been making $1 billion dollar deals this year to acquire catalogs of artists like Queen (source: Variety<\/a>) and Pink Floyd. Considering this, plus other large expenses like acquiring game studios, Toyo Keizai speculates that Sony may not have much leeway financially. <\/p>\n\n\n\n

Moreover, even if Sony makes a tender offer, the acquisition might not go smoothly, as large-scale M&A deals can invite rivals. If a bidding war caused the cost of acquiring Kadokawa to soar, this could prompt Sony to back out. Just this year, the company has been named as a potential buyer in several acquisition deals, but has since seemingly given up. One such example is the Japanese digital manga provider Infocom, which Sony initially planned a bid for (source: Bloomberg<\/a>), however, Infocom was ultimately acquired by US fund Blackstone.\u00a0<\/p>\n\n\n\n

Alternatively, Sony could acquire 15% of Kadokawa\u2019s shares to convert it into an equity-method affiliate, or 50% to turn it into a subsidiary \u2013 both options would strengthen the two companies\u2019 ties without the need to acquire all shares at once, but it remains to be seen what direction negotiations will take. Meanwhile, Kadokawa\u2019s employees have expressed both excitement and disbelief<\/a> at the prospect of joining Sony and the way this would level up their anime sector. <\/p>\n","protected":false},"excerpt":{"rendered":"

Japan’s Toyo Keizai reports that a total buyout of FromSoftware owner Kadokawa could be potentially challenging for Sony.<\/p>\n","protected":false},"author":55,"featured_media":23801,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_gspb_post_css":"","footnotes":""},"categories":[3],"tags":[17],"class_list":["post-40658","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-japan-related-news"],"blocksy_meta":[],"yoast_head":"\nThe cost of buying out Kadokawa entirely could discourage Sony from acquisition deal, says Japanese finance outlet\u00a0 - AUTOMATON WEST<\/title>\n<meta name=\"description\" content=\"Japan's Toyo Keizai reports that a total buyout of FromSoftware owner Kadokawa could be potentially challenging for Sony.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/automaton-media.com\/en\/news\/the-cost-of-buying-out-kadokawa-entirely-could-discourage-sony-from-acquisition-deal-says-japanese-finance-outlet\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The cost of buying out Kadokawa entirely could discourage Sony from acquisition deal, says Japanese finance outlet\u00a0 - 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