Philips selling appliances business to private equity firm in deal valued at $5.2B
Royal Philips is unloading its home appliances business in a deal valued at $5.2 billion (USD), company officials announced on Thursday.
Private equity firm Hillhouse Capital is picking up the product line, which includes everything from refrigerators to washing machines, coffee makers and air fryers. As part of the sale, the China-based investment group is signing a brand licensing agreement to use the Philips name for the next 15 years.
The Amsterdam-based imaging manufacturer first announced its intent to exit consumer appliances in early 2020, planning to concentrate on radiology and other care segments.
“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,” CEO Frans van Houten said Thursday.
The deal values the appliance business at almost $4.4 billion, with Philips expecting to receive about $3.5 billion in cash proceeds after taxes and other costs. Hillhouse will pay more than $824 million to license the brand rights over the next 15 years. Philips said it hopes to close the transaction in 2021’s third quarter.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.