Pac-Man to enlist in Power Rangers’ clan

TOKYO - Bandai, creator of The Power Rangers, has agreed to buy Pac-Man designer Namco for about 175.3 billion ($2.33 billion) in cash and stock to create Japan's second-biggest toy and video-game software maker.

Bandai purchased 6.3 per cent of Namco for 10.5 billion in cash, according to a joint statement released yesterday.

Namco shareholders will receive 1 share each in a new combined company per Namco share, valuing their stock at 1597.5 a share, about 14 per cent higher than April 28's close.

The plan comes seven months after the creation of Sega Sammy Holdings, the nation's largest toy and game software maker, as companies in the $27 billion global video-game industry combine in response to rising development costs.

Microsoft, Electronics Arts and other game makers are increasing payrolls as faster chips allow more sophisticated animation, music and storylines.

For Bandai, the merger may help the toymaker develop games for its characters, analysts said.

"It's positive because they can complement each other's weakness," said Ryoji Nagaoka, an equity strategist at SMBC Friend Securities.

"Bandai has abundant characters but is behind in terms of technology. Namco has graphic technology to develop games for game centres but has no outstanding characters apart from Pac-Man."

The Tokyo-based companies will combine on September 29 under the name Namco Bandai Holdings, which will be led by Bandai president Takeo Takasu and Namco vice chairman Kyushiro Takagi.

Bandai also owns characters such as Digimon and Mobile Suit Gundam. Namco makes the Tekken martial arts series.

Yuuki Sakurai at Fukoku Mutual Life Insurance said merging was "one way of surviving in an industry that is very much nearing maturity, especially in Japan, where the birth rate is low".

- BLOOMBERG