Dutch electronics giant Philips is exiting the consumer electronics business to focus on the home appliance and healthcare areas, as the company is selling its home entertainment side, including its audio and video unit, to Japan’s Funai Electric.
Under the terms of the deal, Funai is set to pay €150m plus a brand licence fee to take over the Philips product lines.
Philips said that the deal for its audio, multimedia and accessories businesses is expected to close in the second half of 2013. Meanwhile, Philips’ video business is set to transfer to Funai in 2017 as a result of existing intellectual property licensing arrangements.
Frans van Houten, CEO at Philips, said that the sale of the company’s consumer entertainment business would allow Philips to focus on reshaping its consumer lifestyle portfolio. He said the goal would be to transform Philips into a leading tech company in the health and well-being area, including energy-efficient lighting.
In 2011 Philips announced a €1.1bn cost-cutting programme that includes cutting 6,700 jobs globally.
Philips also shared its fourth-quarter results today, revealing that earnings for the quarter jumped 50pc to €875m.
Net income was impacted, as expected, by the €509m fine levied by the European Commission last year for Philips’ alleged involvement in a price-fixing cartel.
Philips reported a €355m loss for the last three months of 2012.
"The challenging economic environment in 2012, notably in Europe and United States, has impacted our order book, and hence we expect our sales in 2013 to start slow and pick up in the second half of the year. We remain confident in our ability to further improve our operational and financial performance, enabling us to achieve our 2013 financial targets," said van Houten.