Philips to sell Lumileds stake to US investor Apollo for $1.5 bn

Deal values LED components and car lighting business Lumileds at about $2bn

The sale of Lumileds is the final step in Philips’s two-part sell-off of its lighting businesses. Photograph: Toussaint Kluiters/Reuters

The sale of Lumileds is the final step in Philips’s two-part sell-off of its lighting businesses. Photograph: Toussaint Kluiters/Reuters

 

Philips will sell an 80.1 per cent stake in Lumileds, its LED components and car lighting business, to US investor Apollo, receiving $1.5 billion in cash, it said on Monday.

The deal values Lumileds at about $2 billion including debt, Philips said, and is expected to close in the first half of 2017, pending regulatory approval.

The sale of Lumileds is the final step in Philips’s two-part sell-off of its lighting businesses, after the IPO of Philips main lighting business, Philips Lighting in May.

An earlier attempt to sell the Lumileds components business at a valuation of $3.3 billion to a group of Asian investors failed after it was blocked by the US government due to undisclosed national security concerns.

Lower price

Philips spokesman Steve Klink acknowledged the lower price was a disappointment. The exact reasons for decision of the Committee on Foreign Investment in the United States (CFIUS) were never made known.

The rejected buyout consortium was dominated by Chinese companies, but the LED technology owned by Lumileds was not seen as having important military significance.

“What can you do?,” Mr Klink said. “We feel it was a good price under the circumstances.” Lumileds, which is headquartered in San Jose, California, has been a legally separate company within Philips since 2015.

In the third quarter of 2016, the business reported profit of €101 million, up from €86 million in the same quarter of 2015.

Philips said Lumileds had annual sales of about $2 billion, with 9,000 employees.

– (Reuters)