Sony will unveil its growth strategy for its financial division, which is set to be spun off in a move welcomed by investors as part of the company’s ongoing transformation. Once primarily known for electronics, Sony has shifted focus toward entertainment, which now accounts for over 60% of its sales.
The spin-off follows Sony’s full acquisition of the financial unit four years ago in a $3.7 billion deal. At an investor day on Thursday, Sony executives will detail plans to distribute just over 80% of Sony Financial Group’s shares—covering banking and insurance—to shareholders as dividends in kind.
This spin-off is notable as Japan’s first partial spin-off to benefit from a 2023 tax change and the first direct stock market listing in over 20 years. Unlike a traditional IPO, a direct listing allows a company to go public without issuing new shares.
Sony explained that separating its financial and non-financial businesses will clarify their different goals. The non-financial side seeks capital efficiency, while the financial arm focuses on growth through capital accumulation. Sony will keep just under 20% ownership and license its brand to the financial unit.
The company believes the spin-off offers a fast, low-risk way to separate businesses and reduce the “conglomerate discount” that large Japanese firms often face.
Sony continues to expand its entertainment empire, which includes games, movies, and music. It also leads the market in smartphone image sensors, a key semiconductor product. CEO Hiroki Totoki emphasized the need to invest in chip manufacturing, considering options like partnering with contract chipmaker TSMC to improve efficiency and reduce costs.
Despite challenges like a $701 million hit from U.S. trade tensions, Sony expects flat operating profits this year. The company has earmarked 1.7 trillion yen for capital investments and 1.8 trillion yen for strategic investments through March 2027.
Sony is actively pursuing deals to grow its entertainment content, focusing on Japan. It recently acquired a stake in media firm Kadokawa and considered bidding for Paramount Global. Sony’s anime business, through Aniplex and Crunchyroll, is growing rapidly, with Crunchyroll CEO Rahul Purini calling the market opportunity “massive.” Analysts predict anime could contribute up to 40% of Sony’s pictures segment profits within a few years.
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