THE HAGUE: Electronics giant Philips announced
Tuesday (May 3) it was floating its lighting arm on the stock market in
a "historic" initial public offering, aiming to spin off at least a
quarter of the division's shares.
"The offering would consist of a sale of
existing shares only held by Royal Philips, the current sole shareholder
of Philips Lighting. The offering and listing, and their timing, are
subject to, among other factors, market conditions," the Amsterdam-based
Philips said in a statement.
Philips in late 2014 announced it was selling
off its core lighting business - a mainstay of its income for more than a
century - to focus more on medical equipment.
But since then Philips said it has been
examining its options, hesitating between a straight sale and an IPO in
the Amsterdam stock exchange.
Philips said it would retain the majority
stake in the lighting arm "with the aim to fully sell down over the next
several years" as it shifts its focus to healthcare products.
"Today's announcement is a historic one for
Philips as we aim to separate our company into two market-leading
companies focused on capturing opportunities in the health technology
and connected LED lighting solutions markets respectively," Philips
chief executive Frans van Houten said in the statement.
"Philips Lighting is well-positioned as a stand-alone company," he added.
After the announcement, shares in Philips fell
by around 1.7 per cent in mid-morning trade to around 23.50 euros
(US$27.20) per share on a sluggish Amsterdam stock exchange's AEX index.
Philips sold its first light bulb a few years
after it was founded in 1891, but for the past dozen years has
increasingly shifted its focus on medical equipment, which now accounts
for more than 40 percent of sales.
Philips said it was making the move into
medical technology where margins are strong and less vulnerable to
competition from emerging markets.
Its lighting business, which produces LED
lights, halogen and fluorescent lamps and other electronic components,
however remains a major money-spinner, selling products in around 180
countries.
Last year Philips Lighting raked in 646
million euros in earnings before interest, tax, depreciation and
amortisation, the company said.
It has manufacturing plants in more than 20 countries and holds a patent portfolio of over 14,000 patent rights.
A household name around the world for home
appliances, Philips said in April it had earned 37 million euros
(US$41.5 million) in net income for the first quarter, compared with 100
million euros in the same period in 2015.
The group however in January announced net
profit in 2015 up by 55 per cent to 645 million euros, compared to 415
million euros in 2014.
Post a Comment