Giant Sony Corp. said Friday it’s agreed to sell its storied U.S. headquarters building in Gotham for $1.1 billion to a commercial real estate consortium led by the Chetrit group.
Move comes as Sony, struggling for years to compete with rivals in its core electronics business, tweaks its international portfolio to conserve cash and try to invest it better.
“Sony is undertaking a range of initiatives to strengthen its financial foundation and business competitiveness for future growth,” it said in a statement. “Carefully balancing cash inflows and outflows while working to improve its cash flow by carefully selecting investments (and) selling assets.”
New chairman Kazuo Hirai however has insisted that a sale of the profitable U.S. entertainment business in not in the cards, even though its NYC headquarters will change hands.
The distinctive white marble structure with its massive arched entry at 550 Madison Avenue used to be the former AT&T building. Sony said it will take in net proceeds of $770 million from the deal after debt and other transactions costs. It will realize a $685 million gain on the sale to be recorded as operating income.
The transaction will likely close in March.
Sony Corp. of America headquarters and other Sony businesses, including Sony Music Entertainment, Sony/ATV Music Publishing and Sony Pictures Entertainment, will remain in the building for up to three years under a leaseback deal with the buyer.