Philips sells 80 percent of lighting components unit for $2.8 billion
By Toby Sterling
AMSTERDAM (Reuters) - Philips (PHG.AS: Quote) has agreed to sell an 80.1 percent stake in its lighting components division for $2.8 billion to Go Scale Capital, a technology fund that will seek to expand the company's automotive and LED businesses.
The deal announced on Tuesday is a prelude to an even bigger strategic move for Philips: spinning off its main lighting division, the world’s largest lighting maker, via a stock market flotation, as the Dutch group focuses on medical technology and selected consumer products.
Philips said the deal values the components business, which comprises an automotive lighting unit and the "Lumileds" LED manufacturing business, at $3.3 billion including debt.
ABN Amro analyst Marc Hesselink said the sale price was "considerably above market expectations". The unit made a profit of 141 million euros on sales of 1.42 billion in 2014.
Go Capital was advised by London-based Zaoui & Co, while Philips was advised by Morgan Stanley.
Philips shares, which had hit a 14-month high of 27.675 euros earlier this month, eased 0.4 percent to 26.53 euros by 0952 GMT.
Go Scale, which beat off competition from private equity firms to seal the deal, has previously invested in Boston Power, a U.S.-based manufacturer of electric vehicle batteries, and Xin Da Yang, a Eco-EV company in China.