Dutch
electronics giant Philips has said it is planning to split the company in two,
separating its lighting business from its healthcare division.
Both
companies will continue to be based in the Netherlands and use the Philips
name, it said in a statement.
Philips
has been streamlining its business by selling off underperforming parts of the
business in recent years.
Chief
executive Frans van Houten said the move was meant to prepare the company for
"the next century".
"I do
appreciate the magnitude of the decision we are taking, but the time is right
to take the next strategic step for Philips, as we continue on our
transformation," he said.
"Both
companies will be able to make the appropriate investments to boost growth and
drive profitability, ultimately generating significantly more value for our
customers, employees and shareholders".
Philips,
which began as a lighting company back in 1891, said the separation would make
it easier for the lighting business to enter new markets.
It also
said it would
consider "various options for alternative ownership
structures'' for the lighting arm, meaning it could potentially be sold or
listed separately on the stock market.
Mr van
Houten said separating the two divisions would cost it 50m euros (£39m) a year
until 2016, but by 2016 he expected the split to save it about 300m euros.
The firm
also warned that legal costs as well as "softness in multiple
markets" meant its operating profit for the second half of the year would
be lower than the same period last year.
BBC
Business
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