Philips is to transfer its lifestyle entertainment business (audio, video, multimedia and accessories) to Funai Electric Co.
Under the terms, Funai will pay €150 million in cash and a brand licence fee, for an initial five and a half years, with an option for a further 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 transaction is subject to customary conditions, including regulatory filings and works council procedures. The remote control activities, which are predominantly 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,” said Frans van Houten, CEO, Philips.
“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. It will leverage Philips’ strong brand, strength in innovation, and leadership position in these businesses, with Funai’s strong presence in North and Central America – and Japan, and its supply and manufacturing expertise.”
“This is truly an exciting time for us at Funai,” said Funai president and CEO, Tomonori Hayashi. “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.”
“With this agreement and the joint venture for Philips Television, the Consumer Lifestyle sector will further focus on Health and Well-being. The portfolio, consisting of personal care, health and wellness, domestic appliances and coffee, delivered high single-digit growth in 2012,” said Pieter Nota, CEO Philips Consumer Lifestyle.
“Philips has a proud heritage in audio, video, multimedia and accessories, and today’s agreement with Funai ensures that this business can continue to deliver great Philips-branded innovations to consumers around the world.”
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.