Sony Corp (ADR) (NYSE:SNE) To Sell 50% Stake In Olympus Corp To JP Morgan In An Effort To Raise Funds


Sony Corp (ADR) (NYSE:SNE) has agreed to slash its stake in endoscopes and cameras maker, Olympus Corp (ADR) (OTCMKTS:OCPNY), to raise more investment funds. The company sold half of its stake in Olympus to JPMorgan Chase & Co (NYSE:JPM). Olympus and Sony had formed a joint venture to tap opportunities in the medical devices market category. Sony said it remains committed to pursuing new opportunities in the healthcare equipment segment.

The move, by Sony Corp (ADR) (NYSE:SNE), to reduce its exposure to Olympus, comes just about two years after the two companies agreed to form a medical devices joint venture. Sony had, in 2012, invested 50 billion yen to take a stake in Olympus. In the latest development, Sony sold its stake in Olympus for 71.8 billion yen or just about $600 million. The company offloaded the stake to U.S. leading bank JPMorgan, a move that saw its stake in Olympus dropping to about 5%.

47 billion yen cash boost

Sony Corp (ADR) (NYSE:SNE) expects to book nearly 47 billion yen in a cash windfall in its current quarter, stemming from the deal with JPMorgan for a stake in Olympus. Before the sale of the stake, Sony was the largest single shareholder in Olympus.

According to Sony’s spokesman, Koji Kurata, the move to slash their stake in Olympus is aimed at enabling the company to raise funds. The company is looking for cash to strengthen its financial base while growing its investments in new areas. One of the areas that Sony targets for investment is medical equipment. According to the company’s CEO, Kazuo Hirai, they have key sensor technology that should be able to give them an edge over rivals in the healthcare equipment category.

New opportunities

Sony Corp (ADR) (NYSE:SNE) is also venturing into new areas such as Internet TV, recently unveiling PlayStation Vue, a service that allows PlayStation users to stream online TV content on their devices. So far, Sony’s service provides access to the largest collection of TV channels.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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