TOKYO: Sony Corp will turn its financial arm, Sony Financial Holdings Inc, into a wholly owned unit through a tender offer worth about ¥400 billion (US$3.72 billion), the Japanese electronics and entertainment giant said on Tuesday (May 19).
The deal will allow Sony to strengthen its presence in the fintech field to compete with global tech majors such as Alibaba Group Holding Ltd and Apple Inc.
It also reflects Chief Executive Kenichiro Yoshida's strategy of making revenue streams more stable following a major revamp by his predecessor which shifted Sony's focus away from low-margin consumer electronics to entertainment content and subscription-based businesses.
The deal is the biggest strategic move for Sony under Yoshida since a US$2.3 billion acquisition of EMI Music Publishing, announced soon after Yoshida took the helm in 2018.
Sony already owns 65 per cent of Sony Financial. It plans to offer about ¥2,600 for each remaining Sony Financial share - a premium of about 26 per cent over Monday's closing price of ¥2,064.
Sony Financial, a consistently stable revenue source for Sony, has banking, life and non-life insurance, credit card and nursing care businesses in Japan with about 11,000 staff. Total assets stood at ¥14.5 trillion as of the end of last year.
It contributed operating profit of ¥129.6 billion in the year ended in March, or about 15 per cent of the group.
The plan, first reported by the Nikkei business daily earlier on Tuesday, sent shares of Sony Financial up nearly 17 per cent to ¥2,412 before trading of the stock was suspended. Sony Corp shares rose 3.3 per cent in a broader market that ended up 1.5 per cent.