PHILPS began to face pain cut electronic concept

President and CEO of PHILPS group Kleisterlee said that the future will focus on two areas of health care and fashion consumer products

PHILPS really want to face the! Recently, the "Financial Times" reporter confirmed from Royal PHILPS Electronics Group, the company official Roberts and Kohlberg Kravis (KKR), Silver Laker Paners and AlpInvest Partners NV (hereinafter referred to as the "Consortium") signed an agreement to sell 80.1% of the holders of semiconductor business department.

It is reported that the value of the PHILPS semiconductor business reached 8 billion 300 million euros. This includes turnover of 3 billion 400 million euros, debt and other debt of $4 billion and PHILPS holds a stake of EUR 900 million. Estimated after tax and deduct the relevant costs will be about 6 billion 400 million euros from PHILPS.

Informed sources said the sale is expected to be completed in the fourth quarter of 2006.

PHILPS semiconductor sales for two reasons: first, the current performance of the business is not too good; the two is PHILPS's business transformation considerations." Analysys International Consumer Electronics and semiconductor analyst Zhao Yazhou told the financial times said.

Market research firm Gartner2005 data show that according to revenue (revenue) rankings, in 2004 ranked ninth in PHILPS semiconductor fell to eleventh. In the past 25 years, PHILPS semiconductor fell out of the top fifth for the 10 time.

With the completion of the transaction, the fact that we have completed the business transition to a more robust and can produce economic benefits, the volatility of income away from the periodic components and semiconductor industry generated." President and CEO of PHILPS group Kleisterlee proved, he also announced that PHILPS will become the focus on health and lifestyle "as the core of the company".

Asia Pacific adjustment involving 10000 employees

In fact, PHILPS's action on the semiconductor sector is not suddenly.

December 2005, PHILPS has split the form of semiconductor sector began to adjust.

In June 21st this year, PHILPS also announced that once again, will speed up the pace and split the semiconductor business, said they have split the semiconductor business way down to several ways: merge with other semiconductor companies; the semiconductor sector listed separately, or financial institutions to sell the semiconductor sector shares.

Statistics show that the current PHILPS semiconductor business in the Asia Pacific region, a total of 18000 employees, distributed in China, Malaysia and Philippines and other countries. It is reported that they will be the same as the world's 37000 employees, private equity investment consortium will be fully received.

Insiders, PHILPS group's semiconductor business is mainly involved in mobile phones, MP3 players, TV and automotive chips, etc.. The division's operating profit was 307 million euros last year, sales of $4 billion 600 million, of which 70% of the business from Asia, while the semiconductor business is PHILPS's largest source of income in asia.

The major investment in PHILPS Chinese Market: PHILPS semiconductor (Guangdong) Co., Ltd. (referred to as PSG); PHILPS semiconductor (Suzhou) Co. Ltd, with the largest power device production enterprises - Jilin Huawei electronic Limited by Share Ltd joint venture, Jilin construction group Philips Semiconductors Ltd.

In addition, PHILPS has also held in Hongkong listed on the mainland analog semiconductor chip factory advanced 27.65% H shares in Shanghai.

The complex business structure is a test of the "International Consortium" that is longer than investment. PHILPS are feeling a bit difficult to operate, they can successfully operate this is a question mark in the hearts of the industry.

Give up "Electronics"?

"We are no longer a traditional, vertically integrated electronics company, and in the future, we want to be recognized by the public as a royal PHILPS." Kleisterlee PHILPS future positioning is very clear.

More news Kleisterlee in the sale of the semiconductor sector, will "remove electronic from" two words in the name of the company, the new company's name will be "Royal Holland PHILPS company".

Industry insiders said, PHILPS confirmed that the intention to withdraw from the joint venture between PHILPS LG joint venture and TSMC (TSMC) to prove the meaning of this.

It is reported that PHILPS's semiconductor business in the sale of the company, the company may sell Korean LCD panel giant LG.Philips LCD (LPL) a total of 2.9% stake. PHILPS currently has a total of 32.9% stake in LPL, in order to ensure the smooth operation of the joint venture, PHILPS agreed to hold a LPL of at least 30% stake in the period until July 2007.

The future will focus on two areas of health care and fashion consumer products." For the two aspects of PHILPS, Kleisterlee examples explained that defibrillators such as medical imaging equipment or shock, and includes a razor, a music player and a DVD player and other fashion consumer electronic products.

At the same time, PHILPS also said that the future does not rule out the acquisition or self-development, to seek other profitable business growth possible.

It is reported that in the past 12 months, PHILPS announced the 8 total investment of 3 billion 500 million euros (some acquisition has not been completed), mainly concentrated in the medical system, lighting, consumer health care, brought nearly 1 billion euros of new revenue, and attracted more than 5000 employees to join the new group.

Although PHILPS's confidence in their transformation, but Zhao Yazhou and other industry analysts for the success of the transformation is still