AMSTERDAM: Philips NV will sell its household appliances arm to China’s Hillhouse Capital for â¬3.7 billion (RM18 billion), the Dutch company said on Thursday, as it focuses on healthcare equipment.
Once a sprawling conglomerate, Philips is concentrating on healthcare after spinning off its lighting and consumer electronics divisions in recent years.
âThis transaction concludes our major divestments,â Philips chief executive Frans van Houten said. âGoing forward, our focus is on extending our leadership in health technology.â
Philips said last year it intended to sell the division, whose coffee machines, air purifiers and vacuum cleaners generated â¬2.2 billion in sales last year, as it was no longer part of its core business.
Philips shares were up 1.7% at 1105 GMT, leading Amsterdam’s blue chip AEX index, as it said the deal would lead to net cash proceeds of â¬3 billion in the third quarter.
The company also expects to receive around â¬700 million in the coming years, as Hillhouse will license the Philips brand name for 15 years under the deal.
Van Houten said the proceeds would be used for a mix of dividends, share buybacks and possible acquisitions, but said no new takeovers were in sight.
âWe are currently still running a share buyback programme. We have just done three acquisitions in the last five months, so in a way you could say we have already spent the money,â he said.
âWe will continue to look for opportunities in a very disciplined way.â
Philips described the buyer, Hillhouse Capital, as an investment firm that will continue to innovate. The transaction will be closed in the third quarter pending regulatory approval, it added. â Reuters
