TOKYO — Japan’s top two cable TV operators — Jupiter Telecommunications and Japan Cablenet — are to merge, giving them control of 53% of the market.
Jupiter Telecommunications has 41% market share, and Japan Cablenet has 12%. Together they account for $5.76 billion in sales.
Corporate parents KDDI and Sumitomo confirmed the merger Wednesday. The cablers will fully join forces by next fall, they said.
Sumitomo owns 40.5% and KDDI has 31.1% of Jupiter, which is also known as J:Com. KDDI also owns 95.6% of Japan Cablenet.
In the new setup, KDDI and Sumitomo will together acquire the remaining J:Com shares for $2.7 billion, with each partner kicking in about half each.
Next summer, J:Com will delist its shares, and later acquire Japan Cablenet for $1.32 billion.
Current J:Com prexy Shuichi Mori will serve as CEO of the new merged J:Com until the end of 2013, together with a chairman appointed by KDDI. Starting in January of 2014, the prexy will be appointed by KDDI and the chairman by Sumitomo.
After enjoying steady growth, cable companies in Japan, which make most their coin from pay TV services and internet connections, are reaching a sales saturation point. By joining the two cable operators, KDDI and Sumitomo hope to help them survive and thrive in a fiercely competitive market.