Sony enters into an agreement to sell its U.S. HQ for $1.1 billion

Sony has announced that it will sell its U.S. HQ for $1.1 billion to a consortium led by The Chetrit Group.

The building is located at 550 Madison Avenue in NYC, and the transaction is said to be completed in March 2013. The company mulling to do this last year itself but now they have officially confirmed it.

Sony Music Entertainment, Sony Pictures and other businesses will be in the building for up to three years under a leaseback arrangement with The Chetrit Group–who have purchased the building.

Sony expects to get a lot of profit in tune to about $685 million which will improve its cash flows significantly.

CEO Kaz Hirai has been spending a lot of money on properties such as Olympus, buying medical equipment, and also the cloud networking service Gaikai. He has said that this won’t affect Sony and they are mindful of their cash flows.

The $685 profit is calculated after taking into account the debts of the building and other transaction costs and they are expected to receive net cash proceeds of approx. $770 million

The reason for sale is said to be to strengthen its financial foundation and business competitiveness for future growth.