NETHERLANDS – Royal Philips, a global leader in health technology, has announced that it has completed the sale of the Domestic Appliances business to Hillhouse Investment, a global investment firm.
The results of this transaction, which Philips announced on March 25, 2021, will be reported under discontinued operations in the third quarter of 2021. Philips received cash proceeds after tax and transaction-related costs of approximately EUR 3 billion.
The transaction values Domestic Appliances, a global leader with EUR 2.2 billion sales in 2020 in kitchen, coffee, garment care and home care appliances, at an enterprise value of approximately EUR 3.7 billion.
The total deal value amounts to approximately EUR 4.4 billion resulting from an additional 15-year brand license agreement with annual payments that represent an estimated net present value of approximately EUR 0.7 billion.
“I am pleased that in line with our plans we have completed this transaction and concluded our major divestments,” said Frans van Houten, CEO of Royal Philips. “I am confident that the Domestic Appliances business will be able to expand on its market leadership with the support of Hillhouse Investment.”
In the past 12 months, Philips has further strengthened its portfolio with the launch of new products and solutions, as well as the acquisitions of Intact Vascular in image guided therapy, and BioTelemetry and Capsule Technologies in connected care.
Yesterday, Philips announced they will commence the repair and replacement of DreamStation respiratory devices in the US in connection with its voluntary recall of breathing devices and ventilators in June.
The company obtained authorization from the US Food and Drug Administration (FDA) to repair the affected DreamStation devices.
As part of the rework, which is expected to begin this month, the PE-PUR sound abatement foam will be replaced with new material.
Philips also commenced the replacement of specific affected first-generation DreamStation CPAP devices in the country with DreamStation 2 CPAP devices. The company is in ongoing discussions with the FDA on other portions of the recall and mitigation plan.
“We are executing on our strategy to deliver integrated solutions that support professional healthcare customers achieve the Quadruple Aim and consumers with their health,” said Frans van Houten.
Following the sale of Domestic Appliances, Philips’ EUR 3.2 billion Personal Health businesses will continue to shape its important role in the company’s integrated health continuum approach through products and solutions that support healthy living and prevention of diseases.