Royal Philips (NYSE: PHG, AEX: PHIA; Amsterdam, The Netherlands), which among other things is one of the world's largest producers of LEDs for lighting, announced that it will split into two companies, one concentrating on LED lighting and the other on health care and consumer lifestyle. Philips' 2013 sales in the two areas amounted to EUR 15 billion for Philips’ combined HealthTech businesses and EUR 7 billion for the Lighting solutions businesses. Both new companies will use the Philips brand.
"I do appreciate the magnitude of the decision we are taking," says Frans van Houten, CEO of Royal Philips, "but the time is right to take the next strategic step for Philips, as we continue on our transformation."
According to Philips, the value in the lighting industry is shifting from individual products to systems and services; the new standalone Philips LED lighting outfit will be quicker on its feet, delivering innovation and capital-market access to boost growth in connected LED lighting systems and services, which the company believes will more than offset the decline of conventional lighting. The creation of the LED lighting company follows the recently announced plan to combine Philips’ Lumileds (LED components) and automotive-lighting businesses into a standalone lighting components company.
More information on the process of transitioning Philips' LED lighting business into a separate legal structure will follow sometime in 2015.
