Philips has announced that it has entered into a joint venture in Saudi Arabia, buying 51 per cent of General Lighting Company (GLC), a major lighting company in Saudi, for $235 million. Philips’ current lighting activities in the country will be combined with GLC forming the joint venture that will be named Philips Lighting Saudi Arabia. The deal is subject to regulatory approvals.
Philips says the deal will enable it to strengthen its footprint in the region and create growth opportunities. According to the manufacturer, the Saudi lighting market is forecast to substantially grow in the next four years, driven by construction and investment in energy efficient lighting initiatives. The venture will focus on LED products, systems and services and will manufacture and distribute LED fixtures. The new company will employ around 1,300 people.
“By partnering with GLC, Philips will be able to grow its business in this important market, particularly in relation to LED lighting. We expect LED penetration in the Kingdom of Saudi Arabia to achieve strong double-digit growth by 2018, driven by investments in public and private infrastructure,” said Eric Rondolat, CEO of Philips Lighting.
Philips purchased the shares from a consortium that included Alliance Holding Ltd, the Hejailan Group, and The Carlyle Group. Alliance is the holding company managed by Abdullah Al-Hobayb, founder and chairman of GLC, and will be the joint venture partner with a 49 per cent stake.
“By partnering with Philips, GLC will benefit from best in class lighting innovations and from an extensive lighting know-how and services, which will rapidly strengthen GLC’s energy efficient lighting propositions for the great benefit of the Saudi Arabia market,” said Abdullah Ibrahim Al-Hobayb, chairman of GLC group.
