Unedited press release follows:
Philips to transfer Remaining Stake in TV Joint Venture to TPV
• Brand license agreement will remain in place for Philips-branded TVs
• Transaction will allow TPV to further integrate TP Vision in its TV business
Amsterdam, the Netherlands – Royal Philips (NYSE: PHG, AEX: PHIA) today announced that it has signed a term sheet to transfer its remaining 30% stake in TP Vision, the television joint venture with TPV Technology (0903.HK), to a fully-owned subsidiary of TPV. The signing of definitive agreements is expected to take place in the first quarter of 2014, with completion expected in the second half of 2014, subject to certain regulatory and TPV shareholder approvals. After completion, TPV will fully own TP Vision, which will enable further integration with TPV’s TV business.
“With this agreement, we are creating the right set-up for the business to be successful in the extremely dynamic and competitive TV market,” said Philips Chief Executive Officer Frans van Houten. “By giving TPV full control, they can drive synergies and act in a faster and more flexible way to changes in the market. Together with TPV, we remain committed to making the TV business a success, with a range of innovative Philips-branded TVs.”
The remaining 30% stake in TP Vision will be transferred for a deferred purchase price and all outstanding loans and stand-by facilities between Philips and TP Vision will be transferred to TPV. The brand license agreement between Philips and TP Vision will remain in place, with an annual royalty of 2.2% of sales payable by TP Vision to Philips. The minimum annual royalty has been reduced from EUR 50 million to EUR 40 million. The agreement includes a EUR 50 million transaction-related payment, the effect of which Philips will account for in the fourth quarter of 2013.
About Royal Philips:
Royal Philips (NYSE: PHG, AEX: PHIA) is a diversified health and well-being company, focused on improving people’s lives through meaningful innovation in the areas of Healthcare, Consumer Lifestyle and Lighting. Headquartered in the Netherlands, Philips posted 2012 sales of EUR 24.8 billion and employs approximately 114,000 employees with sales and services in more than 100 countries. The company is a leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as male shaving and grooming and oral healthcare.