Philips profits from sale of shares in Taiwan company

Royal Philips Electronics NV will record a profit of 530 million euros (US$780 million) in the fourth quarter from selling shares of Taiwan Semiconductor Manufacturing Co (台積電).

Philips 800 million shares of Taiwan Semiconductor for US$1.5 billion as part of a stock buyback program by the Hsinchu-based company, Philips said in an e-mailed statement yesterday. The gain is non-taxable, Philips said.

The sale is part of Philips' plan to sell all its Taiwan Semiconductor stock before the end of 2010. Philips is exiting the chip business to focus on appliances, medical scanners and lighting. Chief executive officer Gerard Kleisterlee has sold most of the company's semiconductor unit, NXP BV, and said in March that Philips would sell the Taiwan Semiconductor stake.

Philips 1.3 billion Taiwan Semiconductor shares, or a 5 percent stake, with a market value of 1.7 billion euros (US$2.5 billion).

Philips 18 cents, or 0.6 percent, to 29.68 euros as of 10.58am in Amsterdam trading, giving the shares a gain of 3.9 percent for the year. The announcement came after the close of trading in Taipei, where Taiwan Semiconductor, the world's largest maker of customized chips, rose NT$1.50, or 2.5 percent, to NT$62. The stock fell 7.7 percent last year.

Taiwan Semiconductor said on Nov. 13 it would repurchase US$1.5 billion of stock from Philips and other investors. Philips also is lowering its holding in LG Philips LCD Co, a venture formed with LG Electronics Inc that makes liquid-crystal displays.

The asset sales are helping to pay for dividends, stock buybacks and acquisitions.

On Dec. 21 Philips agreed to pay 3.6 billion euros for medical-equipment maker Respironics Inc, and on Nov. 26 it said it would buy Genlyte Group Inc, a lighting-fixtures manufacturer, for US$2.7 billion. Philips on Dec. 19 announced a 5 billion euro share repurchase.