Inventor of the audio cassette and co-inventor of the CD and DVD, Dutch electronics giant Philips is selling its Lifestyle Entertainment business - Audio, Video, Multimedia and Accessories dvisons - to its long-time Japanese partner Funai Electric for €150 million in cash. The Lifestyle Entertainment business group, within Philips Consumer Lifestyle, is headquartered in Hong Kong and employs some 2,000 people worldwide.

The transaction also includes a brand license fee to take on Philips' product lines - a license agreement for an initial period of five and a half years, with an optional renewal of five years. The deal for the Audio, Multimedia and Accessories businesses is expected to close in the second half of 2013. The Video business will transfer in 2017, related to existing intellectual property licensing arrangements.

This marks Philip's exit from the hi-fi, DVD/Blu-ray home entertainment business. "With this transaction we are taking another step in reshaping the Consumer Lifestyle portfolio and transforming Philips into the leading technology company in Health and Wellness," said Philips CEO, Frans van Houten. The portfolio also consists of Personal Care, Domestic Appliances and Coffee, divisions that delivered high single-digit growth in 2012.

As for Funai, this acquisition will help expand its business into new markets including Brazil, Russia, India and China.

Philips announced last year that it was transferring its loss-making television unit to a new joint venture arrangement with Hong Kong's TPV. The €355 million loss the company reported for the last three months of 2012 was largely attributable to a €509 million fine imposed by the European Commission for participating in a cartel to fix prices in the television business.

Story filed 30.01.13