updated 06:15 pm EST, Tue November 8, 2011
Rakuten buyout puts Kobo in Japanese hands
Japanese e-commerce giant Rakuten said late Tuesday that it was buying Kobo for $315 million in cash. The deal gives it access to both an e-bookstore and e-reader devices, including traditional devices like the Wireless eReader and Android tablets like the Kobo Vox. Rakuten explained it as a push to expand its ecosystem outside of Japan through a media store, where books would just be the start.
The takeover would also let Kobo sell itself through Buy.com and other channels that were off-limits until now.
Under the deal, Kobo would keep its Canadian headquarters in Toronto, along with its existing staff. Both sides expected the deal to wrap up in early 2012.
An acquisition significantly changes the dynamic of the e-book and e-reader landscape. Kobo has stayed a significant player in e-books but has often been third or fourth, usually trailing behind Amazon and Barnes & Noble. It has been relatively successful in Canada, but the liquidation of Borders left it without its largest US presence and forced it to take emergency action with its devices and its bookstore. Rakuten might not just offset the difference but give Kobo scale that it didn't have independently, letting it take on at least Apple and other relative newcomers.