Sony and Kadokawa have finally agreed on the terms of their acquisition.
Sony Group shared this press release on their website:
“KADOKAWA CORPORATION (“KADOKAWA”) and Sony Group Corporation (“Sony”) today signed a strategic capital and business alliance agreement, agreeing to conduct a third-party allotment by KADOKAWA to Sony on January 7, 2025, with Sony acquiring 12,054,100 new KADOKAWA shares for approximately 50 billion yen. With the acquisition of the new shares, Sony will become KADOKAWA’s largest shareholder, holding approximately 10% of its shares, including the shares Sony previously acquired in February 2021.”
As it turns out, Sony is not going to attempt a full takeover of their fellow Japanese conglomerate. With 10 % of Kadokawa’s shares, Sony is the biggest shareholder in the company, but this arrangement will not lead to potential industry regulation, or business consolidation, or the other consequences we usually see from such big money mergers. This ends speculation on this business deal that started last month.
We reported on rumors and speculation that Kadokawa may have asked Sony to acquire them to avoid a takeover by Korean business conglomerate Kakao. Subsequently, there were rumors that Sony and Kadokawa have been talking about a merger or acquisition for years, but Sony only wanted their manga and anime business. And the last thing we heard was that Kadokawa’s own employees distrust their management so much that they welcomed the prospect of a Sony acquisition.
Of course, Sony can always choose to complete their purchase of Kadokawa later, but this deal may be just enough to give the two parties what they want. But for now, the potential looming crisis that several businesses were facing has been averted. In the manga and anime industry, it means that they won’t have to face regulation in Japan or the rest of the world.
For the video game industry, it may mean that Sony can exert more control on who works with Kadokawa video game companies like Spike Chunsoft or FromSoftware. But it won’t close the door entirely for them to work with Sony’s competitors. Nintendo and Bandai Namco in particular were working with game studios owned by Kadokawa, and can still expect to keep doing so.
What Kadokawa may have really wanted from Sony was just their money, as that cash infusion would protect their business for the near and mid-term future. Maybe all the argued benefits of Sony fully owning FromSoftware wasn’t worth taking on all the risks after all? But we won’t pretend to be an insider in Japanese companies or a financial analyst here.
