Royal Philips NV, Amsterdam, the Netherlands, agreed to sell a stake of 80.1% in its Lumileds business to a group of funds managed by affiliates of Apollo Global Management, LLC, New York, for about $2 billion -- $1.5 billion in cash and the rest in debt and debt-like instruments, well below the value put on the business in a sale agreement that was blocked by U.S. authorities last year. Philips will retain the remaining 19.9% interest in Lumileds for at least three years.
Lumileds includes Philips’ automotive lighting, LED components and display lighting businesses. The company’s luminaire and general lighting business was spun off in a public offering last May. Philips had a deal to sell Lumileds to a group led by China’s Go Scale Capital Ltd. for $2.8 billion last year but the deal was blocked in January by the U.S. Committee on Foreign Investment in the United States over national security concerns. Philips is moving out of lighting to concentrate on health care technologies.
The new deal puts Lumileds in the hands of a fund management firm with interests in real estate, credit and private equity. According to Apollo’s website, the firm’s 26 year track record concentrates on nine industries: business services, chemicals, consumer services, retail, financial services, leisure, manufacturing, media and natural resources.
Lumileds has operations in more than 30 countries and has approximately 9,000 employees worldwide. In 2015, Lumileds generated sales of approximately $2 billion.
“With this transaction, we will be completing an important phase of the transformation of our portfolio and I am satisfied that in the Apollo managed funds we have found the right owner for Lumileds,“ said Frans van Houten, CEO of Royal Philips. “In line with our strategic focus on health technology, Lumileds has been operating as a standalone company within Philips since early 2015. 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.”