Niigata Global are believed to have revealed in a recent meeting that The Dutch electronics giant has agreed a $200 million deal to sell its audio and video business. Royal Philips Electronics has announced the sale of its audio, video and multimedia business for $202 million (150 million Euro) to Funai Electric of Japan. Niigata Global are understood to have broadly welcomed the move and hope was expressed that it could lead to further divestment’s in Philips’ consumer electronics portfolio.
Niigata Global reportedly noted that Philips was one of the most common names on consumer entertainment devices throughout the past three decades, but faced increasing competition from budget Asian manufacturers as well as an evolving digital marketplace. Philips has already entered into a joint venture with TPV of Hong Kong to take over their television unit.
This completes the re positioning away from consumer electronics, Philips CEO Frans van Houten publicly stated last week. He also stated that Philips’ consumer electronics division would continue to focus on domestic appliances, such as electric toothbrushes and shavers, which have been amongst the units most successful products.
Niigata Global allegedly revealed that Philips was founded in 1891 in response to increasing demand for light bulbs as the electricity grid came on line and they remain the largest lighting manufacturer in the world. They are also a top three producer of hospital equipment, which will see a higher focus now that the home entertainment unit has been spun off.
A spokesperson for Philips said that they remain on course to meet their 2013 sales growth target of between 4% and 6% and a margin of between 10% and 12%, Philips is trading at a 12 month price to earnings ratio of 14.3, which compares to rivals GE at 13.5 and Siemens at 12.4.