Sega Sammy Holdings
In August 2003, Sammy bought 22.4 percent of Sega's shares from CSK, making Sammy into Sega's largest shareholder. In the same year, Hajime Satomi said Sega's activity would focus on its profitable arcade business as opposed to loss-incurring home software development. In 2004, Sega Sammy Holdings, an entertainment conglomerate, was created; Sega and Sammy became subsidiaries of the new holding company, both companies operating independently while the executive departments merged. According to the first Sega Sammy "Annual Report", the merger went ahead as both companies were facing difficulties. Satomi said Sega had been operating at a loss for nearly ten years, while Sammy feared stagnation and overreliance of its highly profitable pachislot and pachinko machine business and wanted to diversify. Sammy acquired the remaining percentages of Sega, completing a takeover. The stock swap deal valued Sega between $1.45 billion and $1.8 billion. Sega Sammy Holdings was structured into four parts: Consumer Business (video games), Amusement Machine Business (arcade games), Amusement Center Business (Sega's theme parks and arcades) and Pachislot and Pachinko Business (Sammy's pachinko and pachislot business).