Sony said Thursday it will sell its chemical products business to a government-backed bank for ¥58 billion (US$730 million), as part of the company's ongoing efforts to refocus on its core electronics division.
The company has signed an agreement to sell its chemical assets in Japan and abroad to the Development Bank of Japan. The sale will include a subsidiary, Sony Chemical & Information Device Corporation, and other chemical-related operations throughout the company, whose products include the materials used to make LCD displays, optical disks, and RFID touch cards.
Sony first announced it had reached a basic agreement with the bank in March.
"This business has long been a stable source of profit for the company," said a spokesman. "But it will require significant investment going forward."
The company, under new CEO Kazuo Hirai, has made clear efforts to refocus its energies on its electronics products. While giving up profitable assets just months after it booked its largest fiscal loss ever will hurt, Sony also needs funds for the major investments it is making in other areas, such as a $1 billion investment in image sensor production announced last week.
The sale is to completed in the fall of this year. A newly formed company made up of Sony's former chemical businesses will continue to operate, focusing on developing its adhesive and optical material technologies.
Sony does not disclose the sales or profits for its chemical business, but they are a profitable chunk of its massive component division, which booked a $250 million operating loss last fiscal year.
The company has said that as part of its restructuring efforts it will cut around 10,000 jobs, or about 6 percent of its total workforce, 3,000 of which will come from divesting its chemical businesses. No employees will lose their jobs as a result of the deal.
The Development Bank of Japan is funded entirely by the Japanese government, as a method of financial support and bailouts for troubled private organizations.