Japan's Rakuten to acquire e-book retailer Kobo

Rakuten aims to expand its e-books business with the acquisition

Japanese e-commerce company Rakuten said on Tuesday that it plans to acquire Canadian e-book and e-reader company Kobo in a bid to expand in the area of media downloads for consumers.

Rakuten in Tokyo said it has entered into a definitive agreement by which it intends to acquire 100 percent of the total issued and outstanding shares of Kobo for US$315 million in cash.

Spun out of Indigo, a book, gift, and specialty toy retailer in December, 2009, Kobo offers e-readers, e-reader apps and an e-book catalog. An acquisition by Rakuten will give Kobo access to Rakuten e-commerce businesses in a number of countries in Asia, Europe, and North America.

The Japanese company has been expanding recently in the U.K., France and Germany through acquisitions. In October, it acquired UK e-commerce site Play.com.

Upon closing, Kobo will continue to maintain its headquarters, management team and employees based in Toronto, Ontario, Rakuten said.

Kobo, which claimed over 5 million users worldwide in October, positions its e-reading technology as a social platform that allows readers to learn about the life of a book, connect with friends, share their sentiments, and engage in discussions while reading.

It has e-reading applications for Windows, Mac OS X, the iPad, iPhone, BlackBerry, and Android devices.

Kobo announced in September that its apps for iPhone, iPad, Android devices, and its own e-reader would have tighter Facebook integration, so that users can connect with friends on Facebook and see what books they are reading, see books in common, and ask for recommendations, among other features.

Borders Group was one of the early investors in the company. After the book seller went into liquidation earlier this year, Kobo said Borders was only a minority investor, and it was not dependent on Borders for its content which came from separate agreements with publishers.

Rakuten said in October that it will link its own e-book store "Raboo" to Sony's Reader, and will enable transfer of content to the readers using USB (universal serial bus) followed later by a wireless purchase and download service from the reader. Raboo has been supported on Panasonic's UT-PB1 device since it opened on Aug. 10 this year, Rakuten said.

Tags business issuesInternet-based applications and servicesconsumer electronicsRakutenKobointernete-readersMergers and acquisitions

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John Ribeiro

IDG News Service

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