Royal Philips has agreed to sell a majority stake in its light-emitting diode (LED) lighting unit, Lumileds, for $1.5 billion to alternative investment managing house Apollo Global Management.
Apollo will gain 80.1% interest in Lumileds with Philips retaining the remaining 19.9% in the company. Lumileds has an enterprise value of about $2 billion. The transaction is expected to be completed in the first half of 2017 pending regulatory approvals.
Philips says it is selling the stake in Lumileds as part of its strategic focus to transform its portfolio to more of a health technology focus. “Lumileds has been operating as a standalone company within Philips since early 2015,” says Frans van Houten, CEO of Philips. “With Apollo managed funds acquiring a majority interest in Lumileds and partnering with Philips, Lumileds is now well positioned for further growth and value creation, building on its robust innovation pipeline, technology leadership and strong customer base.”
Lumileds is a maker of general illumination, automotive and consumer electronics lighting with more than 9,000 employees in 30 countries worldwide.