PHIA Koninklijke Philips NV

By Maarten van Tartwijk 

AMSTERDAM -- Royal Philips NV said it sold shares in its 125-year-old lighting division at the lower end of the targeted range, valuing the business at EUR3 billion ($3.36 billion).

The Dutch technology group sold a 25% stake in Philips Lighting for EUR20 a share, according to a statement released Thursday. The pricing was slightly below the midpoint of a range of EUR18.50 to EUR22.50 announced last week.

Shares in Philips Lighting will start trading on Euronext Amsterdam on Friday. The offering is one of the largest listings in Europe so far this year.

The sale, which was first announced in September 2014, is the final step in a years-long restructuring spearheaded by Chief Executive Frans van Houten. It will mark the end of Philips as a sprawling conglomerate that produced everything from lightbulbs and television sets to medical scanners and coffee machines.

Philips started making its first incandescent light bulbs in 1891 in the southern Dutch city of Eindhoven. It grew to become one of Europe's biggest technology giants, credited with innovations like the compact disc and the electric shaver.

Over the past decade, the company embarked on a dramatic strategic overhaul as it was dogged by profit warnings and criticism that its diversified corporate structure was slowing it down. Mr. van Houten, a company veteran who took the helm in 2011, has said restructuring Philips is similar to running a marathon.

The Amsterdam-based company now seeks to concentrate on selling health-care technology and services in a market where it competes with General Electric Co. and Siemens AG. It believes the health-care business is more profitable and offers better long-term growth opportunities.

Philips has a good record when it comes to spinning off assets. ASML Holding NV and NXP Semiconductors NV, two former Philips subsidiaries, have fared well after being spun off in the 1990s and 2000s. Both semiconductor companies now have a bigger market value than their former parent.

The future of Philips Lighting, the world's biggest lighting company with EUR7.5 billion in revenue last year, may be less bright. The business still makes most of its profit from producing conventional lamps, a market that is in structural decline, while its fast-growing LED business is facing cutthroat competition.

To become less reliant on manufacturing, Philips management has been seeking to shift the focus of the business to services, such as supplying lighting systems for cities, sporting venues and theaters.

Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com

(END) Dow Jones Newswires

May 26, 2016 17:01 ET (21:01 GMT)

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