Sony To Distribute 80% Stake In Financial Unit To Shareholders, Marks Shift Away From Finance

Sony Group Corp. SONY will present its growth strategy on Thursday for spinning off its financial division, marking the latest phase in the Japanese conglomerate’s shift from electronics to entertainment.

What Happened: The company plans to distribute over 80% of Sony Financial Group shares to stockholders as dividends in kind, reported Reuters.

The move represents Japan’s first partial spin-off utilizing 2023 tax reforms and marks the first direct listing in over two decades, scheduled for September 29.

Sony’s transformation has drawn investor praise as entertainment now comprises more than 60% of total sales. The financial spin-off comes just four years after Sony took full control of the unit in a $3.7 billion acquisition.

The separation will divide balance sheets between non-financial businesses seeking capital efficiency and the financial arm that grows through capital accumulation, Sony told Reuters. Compared to traditional IPOs, the spin-off enables large-scale separation with reduced risk and shorter timeframes.

Why It Matters: Sony will retain under 20% ownership while licensing its brand to the financial business, which includes banking and insurance operations.

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The entertainment giant faces significant headwinds from tariffs, projecting a 100 billion yen ($701 million) impact on operating profit this fiscal year. Chief Financial Officer Lin Tao indicated Sony may pass tariff costs to consumers, while CEO Hiroki Totoki suggested moving PlayStation 5 production to the United States.

Sony reported fourth-quarter sales of $17.24 billion, missing analyst estimates of $20.4 billion, though earnings per share of 21 cents exceeded the 12-cent consensus. PlayStation 5 sales declined to 2.8 million units from 4.5 million year-over-year.

The company authorized a 250 billion yen share buyback program and allocated 1.7 trillion yen for capital investments through March 2027. Sony expects fiscal 2025 sales of $81.82 billion, below analyst projections of $88.7 billion.

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