Oct. 18 (Bloomberg) -- Sony Corp. agreed to sell video-game chip production lines to Toshiba Corp., allowing the company to raise funds for investments in consumer electronics.

Toshiba, Japan's largest chipmaker, signed a preliminary accord to buy Sony facilities that make the Cell processor chips, which run PlayStation 3 game consoles, the Tokyo-based companies said in a statement today. Financial terms weren't disclosed.

The sale fits Sony's plans to scale back on unprofitable businesses, and gives Chairman Howard Stringer funds to invest in factories to make more televisions and digital cameras. Development of the Cell, in which Sony invested more than 200 billion yen ($1.7 billion), led to a loss at the chip unit last fiscal year.

``There were no market-moving surprises,'' said Mitsuhiro Osawa, a Tokyo-based consumer electronics analyst at Mizuho Investors Securities Co. He has an ``outperform'' rating on Sony, the world's second-largest consumer electronics maker behind Matsushita Electric Industrial Co.

The two companies will form a venture to make the processor chips, with a final agreement scheduled to be completed by the end of March, according to the statement. Toshiba will own 60 percent of the venture and Sony will hold the remaining stake, the companies said.

Sony plans to sell part of its semiconductor business to Toshiba for about 100 billion yen ($861 million), the Nikkei newspaper reported today, without citing anyone.

``The two companies will start discussing details of the plan including the price, which will be determined by the end of March next year,'' Sony spokesman Chisato Kitsukawa said.

Sony rose 0.6 percent to close at 5,430 yen on the Tokyo Stock Exchange, before the announcement. Toshiba shares declined 0.2 percent to 1,015 yen. The benchmark Nikkei 225 Stock Average climbed 0.9 percent.

To contact the reporters on this story: Hiroshi Suzuki in Tokyo at hsuzuki5@bloomberg.net; Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net.

Last Updated: October 18, 2007 04:31 EDT