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Royal Philips Electronics has signed an agreement with Japan’s Funai Electric to sell its audio, video, multimedia and accessories businesses for €150 million and a brand licence fee.
With this deal, Funai now expects to get a boost in expanding its operations in emerging markets, including India.
“Royal Philips Electronics...has signed an agreement regarding the transfer of its lifestyle entertainment business to Funai Electric Co,” the Dutch firm said.
The deal is expected to close in the second half of 2013.
The video business will be transferred in 2017, related to existing intellectual property licensing arrangements.
“Under the terms, Funai will pay a cash consideration of €150 million and a brand licence fee, relating to a licence agreement for an initial period of five and a half years, with an optional renewal of five years,” Philips said.
The transaction will leverage Philips’ brand image with Funai’s supply and manufacturing capability, ensuring that the Philips-branded audio and video products will continue to be available to consumers globally, it added.
Commenting on the deal, Philips’ Chief Executive Officer, Frans van Houten said: “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 wellbeing.”
The strong presence of Funai, Philips’ partner for over 25 years, in North and Central America, and Japan will help create a promising future for the Dutch firm’s audio, video and entertainment businesses, he added.
Funai President and CEO, Tomonori Hayashi said: “This transaction will allow us to continue moving forward and grow as a global company... Additionally, this will give Funai the opportunity to meet our goal of expanding our business into markets including Brazil, Russia, India and China.”
Philips Consumer Lifestyle Chief Executive Officer, Pieter Nota said with this deal and the joint venture for Philips Television, the consumer lifestyle sector will now focus on health and wellbeing that includes personal care, health & wellness, domestic appliances and coffee.
The 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 around 2,000 people worldwide.
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