Sony to Raise Stake in Kadokawa, Becoming a Top Shareholder -- Update

Dow Jones12-19

By Kosaku Narioka

Sony Group plans to acquire an additional stake in Japanese publishing house Kadokawa for more than $300 million to become one of its largest shareholders, the company's latest step to strengthen its ability to create entertainment content.

The Japanese entertainment and electronics company said Thursday that it signed a strategic tie-up agreement with Kadokawa and plans to acquire 12.1 million new Kadokawa shares for about 50 billion yen, equivalent to $322.9 million.

After the new investment, Sony Group will become one of Kadokawa's largest shareholders, with a stake of about 10%, it said.

Sony Group and Kadokawa will explore initiatives such as making live-action films and television dramas using Kadokawa's intellectual property, jointly producing anime works and expanding the publishing of Kadokawa's games, the companies said.

Kadokawa's businesses range from publishing books and magazines and producing videogames, movies and animation to online services.

One of Kadokawa's videogame subsidiaries FromSoftware jointly developed the popular action role-playing game "Elden Ring" with Bandai Namco Entertainment.

The Kadokawa unit and Bandai Namco said last week that they would release a new title next year for "Elden Ring," which has sold more than 28.6 million copies worldwide since its release in February 2022.

Sony has spent billions of dollars in acquisitions over the past few years to boost entertainment content creation. Its entertainment businesses, such as games, music and movies, made up nearly 60% of overall revenue in its latest fiscal year, up from about 30% a decade earlier.

Last week, Sony Group shares climbed to a new all-time high, driven by growing hopes for its games segment and other entertainment businesses, surpassing the previous record set during the height of the dot-com bubble in 2000. The stock has risen about 22% year to date.

Earlier this year, Kadokawa became a target of a large-scale cyberattack, leading to share-price declines. The stock has risen in recent weeks amid speculation of a potential investment by Sony Group.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

December 19, 2024 05:55 ET (10:55 GMT)

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Sony to Raise Stake in Kadokawa, Becoming a Top Shareholder -- Update

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