In an attempt to strengthen its fintech presence, the Japanese conglomerate will take full control of its financial arm, Sony Financial Holdings, through a tender offer worth $3.72 billion, reported Nikkei Asian Review on Tuesday.
The move will allow Sony to combine its artificial intelligence and other technologies verticals with Sony Financial, which owns a bank as well as life and non-life insurance businesses.
Why It Matters
An economic downturn, caused by the COVID-19 pandemic, has provided Sony the opportunity to act now, whilst the share prices are low, according to the Review.
Sony already owns 65% of its financial subsidiary and will purchase remaining shares at about $24.21 per share. This is a premium of 30% over Monday’s closing price of $19.22 in Tokyo.
After the tender process is completed this summer, Sony Financial will be delisted and operate as a 100% wholly-owned subsidiary of Sony.
Sony Financial holds nearly $136.06 billion in assets, making it the largest Japanese financial institution related to a listed non-financial company.
Sony Price Action
Sony Financial Holdings shares closed 16.86% higher at $22.44 on Tuesday in Tokyo, while on Monday, its OTC shares closed 0.94% higher at $19.38.
Sony shares closed 3.25% at $64.24 on Tuesday in Tokyo. The company’s shares traded 0.52% higher at $64.40 in the after-hours session on Monday in New York.