Trade Resources Industry Views Philips Tries to Stop $2.8 Billion Deal

Philips Tries to Stop $2.8 Billion Deal

Tags: Philips, Medicine, LED

Dutch multinational announces sale of its LED components and automotive lighting business as it turns toward new HealthTech focus.

Chris Newmarker

Royal Philips has set the wheels in motion when it comes to a split-up of the company that includes Philips Healthcare.

Philips said Tuesday that a consortium led by GO Scale Capital will acquire an 80.1% interest in Philips’ combined LED components and automotive lighting business, which will operate under the name Lumileds post transaction.

The deal, which will provide Philips with $2.8 billion in cash before tax and transaction related costs, is expected to close in the third quarter of 2015, pending closing conditions and regulatory approvals. Philips will retain a 19.9% interest in Lumileds, and its Lighting Solutions business will remain an important customer.

Next up for Philips is its previously announced plans to split into two companies focused on HealthTech and Lighting Solutions. Philips said Tuesday that it currently intends to spin off its Lighting Solutions business in an initial public offering, though other options will be reviewed.

The company said last September that its new HealthTech focus will “capitalize on the convergence of professional health care and consumer end-markets across the health continuum, from healthy living and prevention to diagnosis, treatment, recovery and home care.”

Philips’ healthcare lineup includes consumer-facing medical devices such as toothbrushes and baby monitors as well as dedicated medical devices for use in hospitals.

Philips’ exit from the lighting industry is mirrored by Siemens AG, which left that market as competition stiffened amid the rise in popularity of light emitting diode (LED) technology. Siemens is actually in the process of spinning off its own healthcare business.

Refresh your medical device industry knowledge at BIOMEDevice Boston, May 6–7, 2015.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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Philips Moves Closer to Breakup with $2.8 Billion Deal