Sony Corp. said Tuesday it will make its profitable financial arm a wholly-owned subsidiary for around 400 billion yen ($3.7 billion), through a tender offer, to diversify its sources of revenue and achieve stable growth as it navigates through a severe global market environment.

Sony, which has a 65 percent stake in Sony Financial Holdings Inc., said it will purchase all shares it does not own. The financial services unit generated sales of 1.31 trillion yen, or 16 percent of the Sony group's total, in the fiscal year ended in March, the third-largest profit driver next to its electronics and gaming segments.

The acquisition of Sony Financial, with a solid business base in Japan, will "contribute to stability in management as a global company" amid heightening geopolitical risks, including the new coronavirus pandemic, Sony CEO Kenichiro Yoshida told an online corporate strategy meeting.

"We can enhance our investments by stabilizing our business," Yoshida said.

Sony said last week its group net profit fell 36.5 percent in fiscal 2019 from a year earlier to 582.19 billion yen, affected by the suspension of production and slowing demand for its products amid the coronavirus outbreak.

It forecasts group operating profit to decrease by about 30 percent in the current year.

Sony said it will also change its company name to Sony Group Corp. from April 1, 2021, to focus on its role as the headquarters of the Sony group, and enhance portfolio management and strategic capital allocation.

Sony Electronics Corp., which currently operates the electronics business, will assume the company's traditional name, Sony Corp., it said.

Sony also said Tuesday it will cooperate with Microsoft Corp. in video analytics using artificial intelligence technology for use in retail stores and factories, the first concrete project under their strategic partnership forged last year.

Microsoft's Azure AI capabilities will be embedded in image sensors developed by Sony's subsidiary Sony Semiconductor Solutions Corp. to allow customers to extract useful information from images captured by cameras and other devices.

The two firms said advanced video analysis could uncover new revenue opportunities across industries, such as retailers detecting when to refill products on a shelf or finding the optimal number of open checkout counters according to the queue length.

Manufacturers could use the AI-powered video analysis to monitor movements of workers and identify hazards on their manufacturing floors in real time before injuries occur, they said.

Sony, a global leader in image sensors, has been looking to expand its industrial use beyond mainstay smartphone cameras.

In May last year, Sony and Microsoft said they had formed a strategic partnership covering such areas as cloud-based gaming services and AI. The rare tie-up between two rivals in the game console market is seen as a way to counter Google LLC, which has become a new gaming player with its Stadia game-streaming service.

==Kyodo

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