Philips is to sell off a majority stake in its semiconductor business to private investors for £4.5bn.
A consortium, consisting of Kohlberg Kravis Roberts & Co, Silver Lake Partners and AlpInvest Partners, is acquiring an 80.1% stake in the business.
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Philips Semiconductors supplies chip systems for mobile phones, consumer electronics, digital displays, contactless payment and connectivity systems, in-car entertainment and networking systems.
It has around 37,000 employees worldwide, and had sales of £3.1bn in 2005.
Gerard Kleisterlee, group chief executive officer of Philips, said, “As a standalone company, the semiconductors business will have every opportunity to realise its full potential, and we are very pleased to have found strong partners that share our belief. As a business partner, we will remain strongly committed to the future success of the business.”
Philips will retain the remaining 19.9% in the business. The transaction will put the “enterprise value” for Philips Semiconductors at around £5.6bn, said Philips.
Philips estimates it will receive cash proceeds after tax and transaction related costs of around £4.3bn euros.
The transaction is expected to be completed in the fourth quarter of this year.
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