Philips spins off TV business
updated 07:35 am EDT, Mon April 18, 2011
Philips troubled TV portfolio reframed
New Philips CEO Frans van Houten has made his first move to turn the company’s dipping profits around, spinning off the company’s loss making TV business. Hong-Kong display manufacturer TPV has taken a 70 percent stake in Philips TV arm, with Philips retaining an 30 percent stake. However, it has reserved the option to sell out of the partnership all-together.
According to Reuters, Philips hired van Houten for his expertise in company restructuring. The move to spin-off its TV business is likely to be only the first of many changes to come as van Houten reviews Philips business operations which range over 400 areas. "We are not yet firing on all cylinders...There's much unlocked potential in Philips," Van Houten told Reuters Insider.
Philips hopes that the new partnership will return the division to profitability, where it is currently struggling to compete with low-cost manufacturers. The 3600 strong workforce will remain secure in their jobs for the time being, having been transferred in their entirety to the new operation.
More details on Philips restructuring operations will be disclosed to the market later this year, when it will reveal more details about its financial strategy and operational structure moving forward.
