Japanese electronics and entertainment giant Sony Corp said yesterday it was selling its chemical products division to the Development Bank of Japan (DBJ) as part of a huge overhaul of its business.
Sony, which has been struggling with giant losses and fierce competition, did not say how much the bank would pay for the unit, which makes a variety of products, including films used in LCD panels.
A report in the Nikkei business daily yesterday said the bank may pay Sony as much as ?40 billion (US$481 million).
Sony, which said it was aiming to finalize the deal by May and complete the sale in the first quarter of next year, added that the chemicals arm no longer fit into its wider restructuring plan.
?As a result of such realignment effort, [Sony] believes that this transaction would be the optimum solution for Sony, DBJ and the chemical products businesses themselves,? it said in a statement.
Sony added that the bank?s ?domestic and international networks and other diverse business resources will enable the chemical products businesses to achieve further growth and development in the future.?
The unit, which has about 3,000 employees and operations in Japan, the US, Europe and China, reported sales of ?111 billion for the year to March last year.
The sale is the latest move by Sony aimed at restructuring its business. At the end of last year, it extricated itself from a joint LCD making venture with Korean electronics giant Samsung Electronics Co after about seven years, hoping for greater flexibility in sourcing components.
Sony posted total annual sales of about US$87 billion over the same period.
Reports yesterday said Sony was shaking up its US entertainment business ahead of chief executive Howard Stringer?s departure, while his 51-year-old protege Kazuo Hirai would focus on trying to bring its core Japanese electronics division back to profitability.
The chemical business sale is ?not a negative in that the company is making progress for its business restructure, but its shares may not benefit much unless it tackles its loss-making TV business,? a strategist at a Japanese brokerage said.
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