Royal Philips Electronics has announced that it has entered into a term sheet to transfer its television business into a joint venture with Hong Kong based TPV Technology as part of a long-term strategic partnership. The new company will be 70% owned by TPV and 30% by Philips.
“The partnership will help create the scale and focus needed for our television business to return to profitability and to be successful in the very dynamic television industry,’’ said Philips CEO Frans van Houten, in a statement. “We are committed to the continuity of Philips Televisions in the market through this venture. The partnership will leverage the strength of the Philips brand, innovation power and trade relationships, with the additional scale and manufacturing strengths of TPV. This decisive step is the right one for the television business, Consumer Lifestyle and Philips as a whole.’’
The joint venture will be responsible for the design, manufacturing, distribution, marketing and sales of Philips’ television business worldwide, with the exception of mainland China, India, United States, Canada, Mexico and certain countries in South America. As part of the transaction, Philips will grant the joint venture the right to use the Philips brand, under certain strict quality and customer care standards, for the television business worldwide, excluding the above-mentioned territories. In exchange, Philips will receive revenue-based royalty payments. The existing brand licence agreements in China, India and North America will not move to the joint venture.
