Electronics giant Philips to split in historic move

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By AFP

THE HAGUE: Philips announced on Tuesday it would split in two, separating its healthcare-lifestyle division from the historic lighting business in a dramatic streamlining move by the 120-year-old electronics giant.

“We’re preparing Philips for the next century,” CEO Frans van Houten told a telephone press conference.

“Giving independence to our lighting solutions business will better enable it to expand its global leadership position and venture into adjacent market opportunities,” Van Houten said.

“I do appreciate the magnitude of the decision we are taking, but the time is right to take the next strategic step for Philips.”

Shares in Philips, the inventor of the compact disc, jumped by more than 3.7 per cent after the announcement, which analysts said could herald the selling off of the lighting business.

They were later showing a gain of 2.5pc at 24.08 euros.

Both companies will continue to use the Philips name, the company said in a statement, noting that its HealthTech business had sales of 15 billion euros ($19bn) in 2013 and its lighting business sales of seven billion euros.

Details on how its lighting business will be split off into a separate legal structure are to be announced in 2015.

 

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