Dutch electronics giant Royal Philips NV yesterday said it was selling a majority stake in its LED and car lighting arm to a consortium led by China-based GO Scale Capital investment fund in a deal worth US$2.8 billion.
“Philips today announced that it has signed an agreement with a consortium led by GO Scale Capital through which they will acquire an 80.1 percent interest in Philips’ combined LED components and automotive lighting business,” the Amsterdam-based company said.
“Philips expects to receive cash proceeds, before tax and transaction-related costs, of approximately U$2.8 billion,” it said in a statement.
Philips last year announced it would split in two, separating its healthcare-lifestyle arm from its historic lighting section in a move to streamline the 120-year-old business.
After the sale, to be completed in the third quarter of this year, Philips will retain a 19.9 share in the business, yesterday’s statement said.
The new company is to be named Lumileds, Philips said.
“We are convinced that together with GO Scale Capital, Lumileds can grow further, attract more customers and increase scale as a standalone company,” Philips chief executive Frans van Houten said.
Founded in 1891, Philips employs about 112,000 people worldwide.
GO Scale Capital is a new investment fund sponsored by GSR Ventures (金沙江創投) and Oak Investment Partners.
It has offices in Beijing, Hong Kong and Silicon Valley, California.
Sonny Wu (伍伸俊), co-founder and managing director of GSR Ventures and chairman of GO Scale Capital, is to serve as interim chairman of the new company.
Lumileds, which sells lighting components to the general illumination, automotive and consumer electronics markets, has operations in more than 30 nations.
Last year, it generated sales of about US$2 billion.
Philips is focusing the company on medical technology, betting that patients will increasingly monitor their health and nutrition on smartphones and other devices.
The company is creating a business called HealthTech, which plans to bring together products such as medical scanners, toothbrushes and espresso machines.
Additional reporting by Bloomberg
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