Japanese online shopping firm Rakuten has abandoned its merger plans with television network Tokyo Broadcasting System.

Rakuten, which has been pursuing a "world class" media empire vision - with TBS as a reluctant partner - has agreed to an amicable settlement that will establish a new model for the two companies, based on business tie-ups. These would involve the online distribution of TV programs via Rakuten's portal site.

The internet upstart had originally demanded a merger and management integration under a new holding company. It has been steadily building a stake in TBS [WAMN: 17-Oct-05] which now stands at 19.09%

Under the terms of the new agreement Rakuten will freeze the voting rights for around half of its shareholding, which will be put in trust until next March while talks go on.

TBS president Hiroshi Inoue and Rakuten president Hiroshi Mikitani are due to meet tomorrow (Wednesday).

Data sourced from Financial Times Online; additional content by WARC staff