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Philips splits saying it is time to 'reinvent' itself

Philips splits saying it is time to 'reinvent' itself
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Philips is splitting in two. The Dutch conglomerate is to put its lighting business into a separate company

It is the latest step in Philips’ plans to move out of less profitable consumer electronics and into fast-growing areas like healthcare.

The split will take up to 18 months to complete and the company said it should make it easier for both the new entities to raise money and invest.

Right now it is not clear whether the lighting business will be sold off to investors.

German engineering giant Siemens did the same last year, spinning off its light bulb maker Osram.

Philips, which invented the audio cassette and compact disc, grew into a world-leading electronics company by the 1960s but it has always been ruthless about moving out of less profitable businesses, such as audio and video, vinyl records and TVs.

Philips Chief Executive Frans Van Houten said: “I do appreciate the magnitude of the decision we are taking, but the time is right to take the next strategic step for Philips.”

“Great companies need to reinvent themselves, we can do that, we can stay relevant, we can grow and we can stay successful. It takes courage but it’s a path we’ve been preparing for carefully,” Van Houten added.

with Reuters