Amsterdam, the Netherlands – Royal Philips (NYSE: PHG; AEX: PHIA), a global leader in health technology, today announced that it has signed an agreement to sell its Domestic Appliances business, a global leader with EUR 2.2 billion sales in 2020 in kitchen, coffee, garment care and home care appliances, to Hillhouse Capital, a global investment firm focused on helping companies achieve long-term sustainable growth through digital innovation and enablement. The transaction is expected to be completed in the third quarter of 2021, subject to customary closing conditions, including the relevant regulatory approvals.
The transaction values the Domestic Appliances business at an enterprise value of approximately EUR 3.7 billion. Upon completion of the transaction, Philips expects to receive cash proceeds after tax and transaction-related costs of approximately EUR 3 billion. Additionally, Philips and Domestic Appliances will enter into an exclusive brand license agreement to use the Philips brand and certain of Philips’ other domestic appliances brands for manufacturing, sales, and marketing of Domestic Appliances products globally for a period of 15 years, which is renewable subject to the terms of the brand license agreement. The annual payments over this period represent an estimated net present value of approximately EUR 0.7 billion, resulting in a total deal value of approximately EUR 4.4 billion. Following today’s agreement, the Domestic Appliances business will be presented as a discontinued operation in Philips’ financial statements as of the first quarter of 2021.