Published on April 1st, 2021 | by The GC Team0
Philips to sell small appliance business to Chinese investor
Philips has signed an agreement to sell its Domestic Appliances business to Chinese investor Hillhouse Capital Group, leaving the company to focus on the healthcare side of its operation.
The transaction values the appliance business, which in 2020 had sales of €2.2 billion in small kitchen appliances, garment care and floorcare appliances, at around €3.7 billion. Philips expects to receive cash proceeds after tax and transaction-related costs of approximately €3 billion.
The company said it will also enter into an exclusive brand license agreement to use the Philips brand as well as the Saeco, Gaggia and Walita brands for manufacturing, sales and marketing of Domestic Appliances products globally for a period of 15 years.
The annual payments over this period represent an estimated net present value of approximately €0.7 billion. As a result, the total deal value amounts to €4.4 billion.
The company said the transaction concludes its major divestments, leaving it to focus on professional healthcare and its long-established personal care business.
“Our €3.2 billion Personal Health businesses will continue to play an important role in our health continuum approach through innovation in areas such as oral healthcare, personal care, and mother & child care,” said Philips CEO Frans van Houtenat.
The transaction with Hillhouse Capital is expected to be completed in the third quarter of 2021, subject to customary closing conditions including the relevant regulatory approvals.