Sony Group Corp. is weighing a partial spinoff and separate listing for its financial unit in two to three years, a major decision aimed at bankrolling an investment push in gaming and electronics.
The Tokyo-based company will assess the spinoff plan, which would reverse a $3.7 billion take-private deal concluded in 2020, over the course of this fiscal year. It would aim to retain just under 20% of Sony Financial Group Inc. and sell its shares on a Japanese exchange, the company said in presentation materials accompanying a strategy briefing on Thursday.
Its shares rose as much as 7.3% in Tokyo, their biggest intraday jump in half a 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 at the briefing. “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.”
Sony, a major games publisher, electronics maker and Hollywood entertainment producer, diversified into banking in 2001. It set up the Sony Financial unit in 2004, which now operates Sony Bank as one of the few online-only banks in Japan. The financial division was at one point expected to bring in the majority of the conglomerate’s operating profit, but in recent years focus has shifted to Sony’s entertainment business.
The potential spinoff coincides with growing challenges in Sony’s core business groups. Last month, the company offered a conservative profit outlook for the current fiscal year, warning it expects to sell fewer games from in-house PlayStation Studios teams and that the slump in global consumer spending would continue. The smartphone market is also unlikely to rebound until next year, Totoki said then, though Sony is not considering spinning off its chip division, he added on Thursday.
This week, Sony unveiled plans to buy back up to 2.03% of its shares for as much as $1.5 billion over the next twelve months, helping to trigger a stock rally.
With or without the spinoff of the financial unit, “its importance within the group will not change,” Totoki said.
--With assistance from Vlad Savov.
(Updates with COO comments)
