Japan's Rakuten to buy e-reader maker Kobo for $315 million
Canadian e-reader maker Kobo is being taken over by Rakuten, a Japanese online retailer, for $315 million.
The two companies announced the deal late Tuesday, with Rakuten (Japan's equivalent to Amazon.com) buying Kobo, which is now owned by Indigo Books & Music (Canada's equivalent to Barnes & Noble) and to a much lesser extent by Borders, the bankrupt chain of U.S. bookstores.
Kobo said that Rakuten is "one of the world's top 3 e-commerce companies by revenue" and that the purchase deal will help the two companies grow both their e-reader and digital retail businesses by creating an ecosystem of downloadable media and devices for consumers.
"Kobo provides one of the world’s most communal eBook reading experiences with its innovative integration of social media, such as Facebook and Twitter; while Rakuten offers Kobo unparalleled opportunities to extend its reach through some of the world’s largest regional e-commerce companies, including Buy.com in the U.S., Tradoria in Germany, Rakuten Brazil, Rakuten Taiwan, Lekutian in China, TARAD in Thailand, and Rakuten Belanja Online in Indonesia, and of course, Rakuten Ichiba in Japan," Hiroshi Mikitani, Rakuten's CEO and chairman, said in a statement.
Kobo said it expected the sale to close in early 2012. The Toronto company said its new owner plans to keep the same management team and employees in place.
"From a business and cultural perspective this is a perfect match," Kobo CEO Michael Serbinis said in a statement. "We share a common vision of creating a content experience that is both global and social. Rakuten is already one of the world's largest e-commerce platforms, while Kobo is the most social eBook service on the market and one of the world's largest eBook stores with over 2.5 million titles."
The deal will also enable Kobo to "diversify quickly into other countries and e-commerce categories," Serbinis said.
Kobo's diversifying could help it compete more aggressively with Barnes & Noble's Nook line of e-readers and tablets and Amazon's Kindle devices. Amazon, unlike Barnes & Noble and Kobo, sells moves, music and apps and not just e-books.
This month, Kobo will release its Vox tablet, a gadget with a 7-inch display that runs Google's Android Gingerbread operating system and is being positioned as an alternative to the Nook Tablet and Kindle Fire.
Image: Kobo Vox tablets. Credit: Kobo