NTT DoCoMo, Japan's biggest mobile-phone operator, is buying a 42% stake in Tower Records Japan for ¥12.8 billion ($108.2 million), the two companies said today (Nov. 7). The deal, to be carried
NTT DoCoMo, Japan's biggest mobile-phone operator, is buying a 42% stake in Tower Records Japan for ¥12.8 billion ($108.2 million), the two companies said today (Nov. 7). The deal, to be carried out through a third-party share allotment, will be finalized in late November.
The deal means DoCoMo will be TRJ's biggest shareholder, with Nikko Principal Investments holding 16.5% and Dwango Itochu holding 8.1%. Nikko previously held a majority stake in TRJ. The rest of the company's equity is held by several smaller private investors.
Initial plans for the business tie-up between the firms include the offering of DoCoMo's "mobile wallet" service, allowing users to pay for CDs and other goods at TRJ stores via their mobile phones. "Mobile wallet" currently boasts seven million clients. TRJ will also provide music information to the 45 million subscribers of DoCoMo's mobile-based Internet access service.
"Our corporate vision is to evolve from being the best retailer to being the best music 'complex,' providing music information to our customers," says TRJ CEO Hiroyuki Fushitani.
The two companies say they have no plans to offer mobile-based music downloads at present.
"We want to look at the music business from a more comprehensive perspective," says Takeshi Natsuno, senior VP of multimedia services at DoCoMo.
Fushitani and Natsuno were non-committal on a possible public offering of TRJ shares in the future. TRJ's current management structure will remain intact, although Natsuno says DoCoMo may have some "non full-time directors" on the TRJ board going forward.
In May 2002, Tower Records Japan was sold to Tokyo-based Nikko Principal Investments Japan, a wholly-owned subsidiary of Japanese securities company Nikko Cordial.