Philips Cuts USD5.2 Billion Home Appliance Deal With China's Hillhouse to Hone Healthcare Focus
Liao Shumin
DATE:  Mar 26 2021
/ SOURCE:  Yicai
Philips Cuts USD5.2 Billion Home Appliance Deal With China's Hillhouse to Hone Healthcare Focus Philips Cuts USD5.2 Billion Home Appliance Deal With China's Hillhouse to Hone Healthcare Focus

(Yicai Global) March 26 -- Dutch conglomerate Philips will sell its global home appliance business to Beijing-based private equity firm Hillhouse Capital Group for about EUR4.4 billion (USD5.2 billion) to sharpen its focus on healthcare technologies.

The asset is valued at about EUR3.7 billion and Hillhouse Capital needs to pay around EUR700 million (USD824.7 million) for 15 years of global brand licensing fees, the Amsterdam-headquartered company said in a statement yesterday. The transaction is expected to close by September.

Chinese investors, including CDH Investments and TCL Technology Group, had entered the second round of bidding for the unit that makes products in the areas of kitchen, coffee, and garment care after France's Pai Partners and New York's Apollo Global Management reportedly showed initial interest. Last year, the asset's sales tallied about EUR2.2 billion.

Before this, Philips has sold its lighting, television, and entertainment divisions. “This transaction concludes our major divestments," said Chief Executive Frans van Houten. "Going forward, our focus is on extending our leadership in health technology and continuing our transformation into a solutions company supporting professional healthcare customers to achieve the Quadruple Aim and consumers with their personal health.”

Hillhouse Capital is a household name in China's PE field with early investments in some of the country's largest tech companies, including Tencent Holdings. “We look forward to joining forces with Philips to expand into new markets and capture more growth opportunities globally,” said founder and CEO Lei Zhang.

Shares of Philips [NYSE: PHG] advanced 2.2 percent to USD57.11 yesterday.

Editor: Emmi Laine, Xiao Yi
 

 

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Keywords:   Philips,Hillhouse Capital,Domestic Appliances