Sony has been aggressively growing its entertainment and electronic equipment segments in the last couple of years. In a new move, the company plans to divest some of its other business to fund growth for these two divisions.
The Japanese multinational conglomerate is looking to spin off and relist shares for its financial unit to pump new investment into its image-sensing and entertainment businesses. The Sony Financial unit operates the online-only Sony Bank, life and non-life insurance, nursing care, and venture capital.
Sony shared the plan during a recent strategy briefing with investors. According to the plan, the company will retain under 20 percent of its Financial Services arm. The proceeds of the sell-off will be used to fund various investments, most notably in the image sensor division.
Investors welcomed the new direction that Sony is taking. The company's shares jumped 7.3 percent when the new strategy was announced. This is the biggest intraday surge that Sony has had this year.
"Sony's image sensor and entertainment businesses will need much bigger investment in the future. Meanwhile, you need a strong base for financial services," Chief Operating Officer Hiroki Totoki said of the restructuring plans. "That's why we decided to consider using a virtual spinoff — which allows us to keep Sony's name on the financial service arm while it gains the ability to raise cash independently."