Sony commences preparations for ~80% spin-off of financial services business in 2025

As announced at the Corporate Strategy Meeting for FY2023 held on May 18, 2023, Sony has been proceeding with the assessment of a partial spin-off of Sony Financial Group Inc. (“SFGI”), a wholly-owned subsidiary of Sony, which operates the Financial Services business. On February 13, 2024, Sony obtained approval from the Minister of Economy, Trade and Industry of Japan regarding its Corporate Restructuring Plan for the Spin-off based on the Act on Strengthening Industrial Competitiveness of Japan. In light of receipt of the Approval, Sony decided to begin concrete preparations for the execution of the Spin-off and the listing of the shares of SFGI.

Overview of the Plan and Approval

Under the Plan, Sony plans to distribute slightly more than 80% of its shares of SFGI to Sony’s shareholders through dividends in kind as a result of the Spin-off, and to hold slightly less than 20% of shares of SFGI after the execution of the Spin-off. In addition, in accordance with the provisions of the Act, through the execution of the Spin-off, Sony aims to improve the productivity and the soundness of financial conditions of the Sony Group’s businesses without the Financial Services business, and to carry out measures for growth in the entertainment businesses and the image sensor business, which are Sony’s focus areas.

As a result of the Approval, Sony is entitled to special treatments in respect of certain requirements under the Companies Act of Japan, such as the ability to execute the Spin-off only by a resolution of the Board of Directors of Sony, and Sony expects to utilize such special treatments. Additionally, Sony and SFGI plan to proceed with preparations so that the Spin-off will satisfy the other requirements for tax-free treatment in Japan in addition to the Approval. If such requirements are satisfied, Sony will not be subject to capital gains tax on dividends in kind of SFGI shares, and Sony’s shareholders will not be subject to taxation on such dividends, for Japanese tax purposes.

Expected Schedule of the Spin-off

Under the Plan, Sony plans to execute the Spin-off based on the following schedule.

May 2025

• Resolution of the Board of Directors of Sony for the execution of the Spin-off.

October 2025

• Execution of the Spin-off (effective date of the dividends in kind)
• Listing of shares of SFGI

Outlook

The impact of the execution of the Spin-off on Sony’s consolidated results has not been determined at this time.

Q3/FY2023 Results

The announcement of the plan approval for the spin-off coincided with Sony’s results presentation for the third quarter of fiscal year 2023, ending December 31.

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