By River Davis

TOKYO -- Sony Corp. said it would spend $3.7 billion to take full control of its banking and insurance unit, calling the Japan-centered business a hedge against uncertainty caused by the new coronavirus and global tensions.

With the move, the conglomerate bucked criticism from New York-based hedge fund Third Point LLC, which has said Sony has too many businesses and should consider selling its stake in the financial-services unit.

Instead, Sony said it would reassume 100% control of Sony Financial Holdings Inc. nearly 13 years after the unit had an initial public offering in Tokyo. It currently owns 65% of Sony Financial.

"As the world grapples with coronavirus and geopolitical risks, the financial services business is important because it has a stable business platform in Japan," said Sony Chief Executive Kenichiro Yoshida at an online briefing.

Though little known elsewhere, Sony Financial is a significant presence in Sony's home country, offering life insurance, auto insurance and banking products such as foreign-currency accounts.

The unit has produced consistent profits -- generally around 15% to 25% of Sony's total operating profit in recent years -- with less volatility than segments such as videogames that fluctuate around the timing of new console and game releases.

More recently, the business of selling televisions and audio equipment has taken a hit from store closures and supply-chain problems during the pandemic. The company has said it expects operating income to fall by at least 30% in the year ending March 2021 assuming that business operations return to normal by the end of 2020.

Sony said Tuesday it would pay Yen2,600 (about $24) a share, a 26% premium to Monday's closing price, to retake 100% control of Sony Financial. The financial company's shares rose nearly 17% to Yen2,412 in the minutes after the Nikkei newspaper reported the planned transaction. Trading in Sony Financial shares was then halted.

Sony's lineup also includes the PlayStation videogame business, smartphone components, Hollywood movies and audio equipment.

Third Point, the New York fund, has said Sony shares suffer from a conglomerate discount, meaning investors value the whole less than the sum of the parts because they fear management can't properly run such a diverse cast of businesses. In June 2019, the fund said it had invested $1.5 billion in Sony and called on the company to consider spinning off its image-sensor business -- which supplies Apple Inc. and other smartphone makers -- and selling its stake in Sony Financial.

Mr. Yoshida said the diverse businesses were a strength and helped the company grow. The latest acquisition gives Sony the opportunity to "foster new synergies by leveraging its technologies," he said.

Other technology giants have been pushing into finance. Last year, Apple introduced a credit card.

Over the past decade, Sony has shown some willingness to cut ties with poorly performing or peripheral business segments. In 2017, it sold its battery business to Murata Manufacturing Co., and last year it sold its more than $700 million stake in medical-equipment maker Olympus Corp. Mr. Yoshida said he is going to continue reviewing Sony's lineup.

The company said Tuesday it would rename itself Sony Group Corp. next year to stress the role of headquarters in managing the group's portfolio of businesses.

Sony's conglomerate strategy showed its advantages in recent quarters as gains from image sensors offset setbacks in its game and electronics units. Resilient demand for smartphones with new fifth-generation wireless technology made Sony's image-sensor business a bright spot amid widespread losses in the January-March quarter.

Sony shares closed 3.2% higher in Tokyo trading compared with a 1.5% rise in the Nikkei Stock Average.

Write to River Davis at River.Davis@wsj.com