TOKYO (Reuters) -Japan’s Panasonic Holdings said on Friday it plans to sell a stake in its automotive systems business to funds managed by U.S. private equity firm Apollo Global Management, and has signed a memorandum of understanding with an Apollo affiliate.

Shares of Panasonic surged on the news, gaining 5.3% in Tokyo trade as at 0550 GMT. Panasonic also said it could potentially list the business in the future.

“The parties will continue discussions on an exclusive basis with the intention of finalising the details of the agreement by March 31, 2024,” Panasonic said in a press release.

Continued investment in the automotive systems business would be necessary to achieve sustained growth for the company amid a rapid shift to electric cars and changes to vehicle architecture, Panasonic said.

(Reporting by Daniel Leussink; Editing by David Dolan and Christopher Cushing)