Philips to sell its Domestic Appliances business to global investment firm Hillhouse Capital
25 March 2021 - 8:50PM
March 25, 2021
- Transaction values Domestic Appliances at an enterprise value
of approximately EUR 3.7 billion
- Philips expects to receive cash proceeds after tax and
transaction-related costs of approximately EUR 3 billion in the
third quarter
- Additional 15-year brand license agreement with annual payments
that represent an estimated net present value of approximately EUR
0.7 billion, resulting in a total deal value of approximately EUR
4.4 billion
- Transaction is expected to be completed in the third quarter of
2021 subject to customary closing conditions
- Domestic Appliances will be presented as a discontinued
operation in Philips’ financial statements as of the first quarter
of 2021
Amsterdam, the Netherlands – Royal Philips
(NYSE: PHG; AEX: PHIA), a global leader in health technology, today
announced that it has signed an agreement to sell its Domestic
Appliances business, a global leader with EUR 2.2 billion sales in
2020 in kitchen, coffee, garment care and home care appliances, to
Hillhouse Capital, a global investment firm focused on helping
companies achieve long-term sustainable growth through digital
innovation and enablement. The transaction is expected to be
completed in the third quarter of 2021, subject to customary
closing conditions, including the relevant regulatory
approvals.
The transaction values the Domestic Appliances business at an
enterprise value of approximately EUR 3.7 billion. Upon completion
of the transaction, Philips expects to receive cash proceeds after
tax and transaction-related costs of approximately EUR 3 billion.
Additionally, Philips and Domestic Appliances will enter into an
exclusive brand license agreement to use the Philips brand and
certain of Philips’ other domestic appliances brands for
manufacturing, sales, and marketing of Domestic Appliances products
globally for a period of 15 years, which is renewable subject to
the terms of the brand license agreement. The annual payments over
this period represent an estimated net present value of
approximately EUR 0.7 billion, resulting in a total deal value of
approximately EUR 4.4 billion. Following today’s agreement, the
Domestic Appliances business will be presented as a discontinued
operation in Philips’ financial statements as of the first quarter
of 2021.
“I am pleased that in Hillhouse Capital we have found a new home
for the Domestic Appliances business to further expand on its
market leadership, strong brand and pipeline of new innovations,”
said Frans van Houten, CEO of Royal Philips. “This transaction
concludes our major divestments. Going forward, our focus is on
extending our leadership in health technology and continuing our
transformation into a solutions company supporting professional
healthcare customers achieve the Quadruple Aim and consumers with
their personal health.”
Philips is a leading provider of integrated solutions to improve
people's health and well-being and optimize care provider
productivity across the health continuum from healthy living and
prevention, to diagnosis, treatment, and home care. Philips’ EUR
3.2 billion Personal Health businesses play an important role in
the company’s integrated health continuum approach through
consumer-driven product and solutions innovation in areas such as
oral healthcare, personal care, and mother & child care.
Hillhouse CapitalHillhouse Capital invests
globally with the aim of working with entrepreneurs and management
teams to build high quality businesses that achieve sustainable
long-term growth. Hillhouse has deep experience in integrating
technology and data-driven architectures to drive digital
innovation and business expansion. The firm has worked successfully
with many global consumer and retail businesses to deepen consumer
engagement and introduce innovative direct-to-consumer models,
growing new customer segments and markets.
“We look forward to joining forces with Philips
to expand into new
markets and capture more growth opportunities
globally,” said Lei Zhang, Founder and CEO of
Hillhouse Capital. “We are aligned with Philips’ mission
to bring high quality products to support healthy and fulfilling
lifestyles for consumers across the globe.”
Domestic AppliancesThe Domestic Appliances
business, which will remain headquartered in the Netherlands, is
active in more than 100 countries, and has a global innovation,
manufacturing, and commercial footprint. Its successful products
include the Airfryer, Fully Automatic Espresso Machine with
LatteGo, Perfect Care Elite steam generator, Air Purifier and
SpeedPro Max vacuum cleaner. The business employs approximately
7,000 employees globally.
“I am convinced that together with Hillhouse Capital’s
deep e-commerce, supply chain and digital
expertise, we will be in a great position to continue bringing
meaningful innovations to the consumer’s homes,” said Henk de Jong,
CEO of Philips Domestic Appliances. “Based on our market leading
product portfolio, broad customer and consumer base and R&D
capabilities, we are keen to keep supporting families and
individuals to lead healthier and happier lives. We look forward to
working with Hillhouse to capture additional growth
opportunities.”
For further information, please contact:
Ben ZwirsPhilips Global Press OfficeTel.: +31 6 15213446E-mail:
ben.zwirs@philips.com
Derya GuzelPhilips Investor RelationsTel.: +31 20 59
77055E-mail: derya.guzel@philips.com
About Royal PhilipsRoyal Philips (NYSE: PHG,
AEX: PHIA) is a leading health technology company focused on
improving people's health and well-being, and enabling better
outcomes across the health continuum – from healthy living and
prevention, to diagnosis, treatment and home care. Philips
leverages advanced technology and deep clinical and consumer
insights to deliver integrated solutions. Headquartered in the
Netherlands, the company is a leader in diagnostic imaging,
image-guided therapy, patient monitoring and health informatics, as
well as in consumer health and home care. Philips generated 2020
sales of EUR 19.5 billion and employs approximately 82,000
employees with sales and services in more than 100 countries. News
about Philips can be found at www.philips.com/newscenter.
Forward-looking statements This release
contains certain forward-looking statements with respect to the
financial condition, results of operations and business of Philips
and certain of the plans and objectives of Philips with respect to
these items. Examples of forward-looking statements include
statements made about the strategy, estimates of sales growth,
future EBITA, future developments in Philips’ organic business and
the completion of acquisitions and divestments. By their nature,
these statements involve risk and uncertainty because they relate
to future events and circumstances and there are many factors that
could cause actual results and developments to differ materially
from those expressed or implied by these statements.
This press release contains inside information within the
meaning of Article 7(1) of the EU Market Abuse Regulation
- Philips Airfryer XXL
- Philips SpeedPro Max
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