Royal Philips has signed an agreement regarding the sale of Woox Innovations, its Audio, Video, Multimedia and Accessories business, to Nashville-based Gibson Brands.
Under the terms, Gibson Brands will pay $135 million and a brand license fee, relating to a license agreement for an initial period of 7 years. The deal is expected to close in the second half of 2014, subject to customary conditions, including regulatory filings and works council procedures.
Until recently, Gibson,based in Nashville, USA, was best known for its guitars, which are sold under a range of brand names, including the famous Les Paul guitars. The company has most recently invested in audio brands including Onkyo and TEAC as part of its ambition to become the global leader in music and sound. This transaction will leverage Gibson Brands’ strong market presence in the US and Japan, and Woox Innovations’ market strength with Philips-branded audio and home entertainment products in Europe, China, Latin America and other growth geographies.
“With this transaction, we are taking another important step in Philips’ transformation to become a leading technology company in health and well-being,” said Philips CEO Frans van Houten.
“Philips and Gibson Brands have played significant roles in shaping the home entertainment and music industries and with this agreement the Philips brand will continue to be associated with innovative products in this space.”
“This agreement is the most significant step yet in Gibson Brands’ journey to become the largest music and sound technology company in the world,” said Gibson Brands Chairman and CEO Henry Juszkiewicz.
“By acquiring Philips’ audio and home entertainment business, our goal is to continue to provide the most exceptional consumer audio products and experiences in the world. I am thrilled to extend the reach of Gibson Brands around the world and to welcome this great team to the Gibson family.”
The Video business will stay with Philips until a transfer to Gibson Brands in 2017, related to existing intellectual property licensing arrangements.
Woox Innovations, headquartered in Hong Kong with approximately 1,900 employees worldwide, is a global and profitable business driving the Philips brand in sound, home entertainment and related accessories.
Philips originally sold its Audio, Video, Multimedia and Accessories business to Funai Electronics in January 2013, but the deal turned sour with Philips taking legal action against its partner claiming breach of contract.
