Japanese electronics and entertainment giant Sony has decided to take full control of its listed financial arm Sony Financial Holdings to boost its balance sheet.
Sony, which is expected to change its name to Sony Group next year, already owns a 65% stake in Sony Financial Holdings.
For the remaining stake, Sony has agreed to pay JPY2600 ($24.17) for each share of Sony Financial, a 26% premium against the previous closing price of JPY2064 ($20).
The Tokyo-based company will acquire the remaining stake in Sony Financial through a tender offer which is expected to be worth nearly JPY400bn ($3.72bn).
A successful transaction will turn the financial unit into Sony group’s wholly-owned subsidiary.
Sony Financial, which employs about 11,000 people, offers banking, life and non-life insurance, credit card and nursing care services in Japan.
The company has recorded JPY14.5trn ($134.7bn) in total assets as at the end of 2019.
The unit contributed an operating profit of JPY129.6bn ($1.20bn) or 15% of Sony’s consolidated financial results for the fiscal year ended March 2020.
Through the latest deal, the multinational conglomerate intends to boost its presence in the fintech space and compete with global tech giants like Alibaba and Apple.
Sony CEO Kenichiro Yoshida said: “The financial business has a stable profit base in Japan. Taking full control of the business will help us hedge growing geopolitical risks.”
Sony intends to make its revenue stream more stable after a major revamp shifted its focus from low-margin consumer electronics to entertainment content and subscription-based businesses.