Philips Completes Health-Tech Shift With $4.37 Billion Home Appliances Sale -- Update
March 25 2021 - 8:09AM
Dow Jones News
--Sale of domestic-appliances unit concludes Philips' major
divestments
--The deal with China's Hillhouse Capital includes a 15-year
brand license agreement worth EUR700 million
--CEO says Dutch company will continue to look for potential
acquisitions
By Adria Calatayud and Jaime Llinares Taboada
Koninklijke Philips NV said Thursday that it has agreed to sell
its home appliances business for 3.7 billion euros ($4.37 billion)
to Chinese investment firm Hillhouse Capital, a deal that concludes
Philips's major divestments and completes its shift toward health
technology.
The Dutch company said last year that it would review options
for its domestic appliances business, which houses kitchen, coffee,
garment care and home care appliances and generated sales of EUR2.2
billion in 2020. The company also considered an initial public
offering, but opted for a sale in light of strong interest from
potential buyers, it said.
Philips said it expects to receive EUR3 billion in cash for the
sale after taxes and transaction-related costs. The deal also
includes a 15-year exclusive brand license agreement for an
estimated value of EUR700 million over the period, resulting in a
total transaction value of EUR4.4 billion.
The deal is expected to be completed in the third quarter of
2021.
"This transaction concludes our major divestments," Philips
Chief Executive Frans van Houten said in a call with reporters.
After closing the sale of its home-appliances activities, the
company will still own consumer-focused operations like its
personal care, oral care or child care activities, but they all
play an important role in its health-focused future and Philips has
no intention to divest them, Mr. van Houten said.
The sale won't fund new deals, as Philips has agreed to three
acquisitions --BioTelemetry, Capsule Technologies and Intact
Vascular-- in the last five months and those already took into
account expected proceeds from the domestic-appliances deal, its
CEO said.
"In a way, you could say that we have already spent the money,"
Mr. van Houten said. "We will continue to look for opportunities in
a very disciplined way," he added.
Write to Adria Calatayud at adria.calatayud@dowjones.com and to
Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
March 25, 2021 07:54 ET (11:54 GMT)
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