Bright Idea or Not? Philips to Spin Off Lighting Branch

Bright Idea or Not? Philips to Spin Off Lighting Branch

Philips plans to sell a quarter of its lighting business on the stock market to focus on its larger medical equipment operations.

Chief executive of the world’s largest maker of lighting, Frans van Houten, has called the move “historic” for the Dutch company.

“We aim to separate our company into two market-leading companies focused on capturing opportunities in the health technology and connected LED lighting solutions markets respectively.” he says. According to Business Standard, Philips will retain the majority stake in the lighting arm with the goal to fully sell down over the next several years.

“The offering would consist of a sale of existing shares only held by Royal Philips, the current sole shareholder of Philips Lighting. The offering and listing, and their timing, are subject to, among other factors, market conditions,” the Amsterdam-based Philips said in a statement to the Standard.

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Philips initially announced it would sell the lighting division in 2014, but the process has taken two years. The company was weighing whether a listing or sale to a private equity firm would be better for shareholders. It has decided to spin off the branch in IPO.

It seems if you’ve been following the company, the move should have been expected. Philips dropped the word “electronics” from its name in 2013, according to Fortune, and has gradually disposed of most of its consumer products. Shaver and toothbrush operations are now under a “personal health” division. The remaining healthcare-dominated business has been tipped as a possible target for General Electric, according to reports.

Furthermore, some analysts have said a separate Philips lighting business could create friction with rival Osram, as the two battle price pressures in LED lighting and the decline of traditional bulbs.

What could this mean for builders? Hopefully more affordable products …



About The Author

Andrea Medeiros is editor-in-chief, multimedia director and content developer at TecHome Builder. She is a former TV news reporter turned home technology guru and is using her broadcast journalism skills to help our team deliver complicated, tech-focused content in a conversational way. She has a decade of experience in the editorial realm—interviewing, writing and editing stories as well as shooting, editing and producing video content. She is most interested in covering interoperability among smart devices.

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