TOKYO — Jupiter Telecommuni-cations and Titus Communications announced plans to merge on Tuesday, producing a new cable TV giant with some 1 million subscribers that will aim to become the top platform for broadband services.
The two companies will unite in a stock-for-stock exchange in September, when Titus will become a wholly owned subsidiary of Jupiter.
Deal, which unites Liberty Media and Microsoft, is expected to set the tone for consolidation in the highly fragmented Japanese cable TV market.
The main shareholders in the merged company, which will have equity capital of 47 billion yen ($448 million), are trading house Sumitomo with a 35% share, Liberty Media with 35% and Microsoft with 24%.
“The scale and importance of this transaction raises Jupiter and Titus firmly in the lead in the Asia-Pacific region, in terms of consolidation of broadband,” said Miranda Curtis, president of Liberty Media Intl.
The merged company, carrying the Jupiter name, will package cable TV offerings, broadband services and telecommunications to its customers.
The company plans an initial public offering of its shares, but the timing depends on market conditions.
Microsoft will provide expertise in data transmission services, as well as developing technology for set-top boxes, that will allow for interactive services.
Titus president Lee Daniels, who will be the prexy of the merged com-pany, said that the merger announce-ment should help fuel consolidation in the industry. “Because of the direction of the industry and the increased capital requirement to move into digitalization, the Internet and data services, you will see people revisiting their current structures, and that should lead to consolidation,” he said.