After 80 years Philips exits consumer electronics, sells division for $201 million
Funai will pay a cash consideration of EUR 150 million and a brand license fee, relating to a license agreement for an initial period of five and a half years, with an optional renewal of five years. The deal for the Audio, Multimedia and Accessories businesses is expected to close in the second half of 2013. The Video business will transfer in 2017, related to existing intellectual property licensing arrangements. The Remote Control activities, which are mostly business-to-business, are excluded.
"With this transaction we are taking another step in reshaping the Consumer Lifestyle portfolio and transforming Philips into the leading technology company in Health and Well-being. I am confident that today’s agreement with Funai, our partner for over 25 years, will create a promising future for Philips Audio, Video and Entertainment, and continuity for our customers," said Philips chief executive officer Frans van Houten.
Philips was the world's biggest supplier of radios, inventor of the audio cassette and the first videocassette recorder, and it launched the compact disc. But the company didn't make it in the era of digital download.
"This transaction will allow us to continue moving forward and grow as a global company. We will benefit from Philips’ legendary know-how and innovation, as well as the excellent talent they have in place around the world, allowing us to work as a team to leverage and grow the Philips brand in Audio, Video and Entertainment. Additionally, this will give Funai the opportunity to meet our goal of expanding our business into markets including Brazil, Russia, India and China," said Funai president and CEO, Tomonori Hayashi.
Philips Audio, Video, Multimedia and Accessories make up the Lifestyle Entertainment business group within Philips Consumer Lifestyle. This business group is headquartered in Hong Kong and employs approximately 2,000 people worldwide. ■