Philips is selling a majority stake of its lighting business, Lumileds, to Apollo Global Management for $2 billion, including debt. The deal comes nearly a year after the company’s bid to offload Lumileds to a Chinese firm fell through due to pressure from U.S. regulators.
The deal will see Apollo picking up an 80.1% stake in Lumileds, with Philips holding onto the remaining 19.9%, according to a statement. While it values the lighting and automotive business at $2 billion, Philips expects to pick up about $1.5 billion in cash. The transaction is slated to close in the first half of 2017, subject to regulatory approval.
In January, the Committee on Foreign Investment in the United States nixed Philips’ sale of Lumileds to China’s GO Scale Capital for national security reasons. At the time, Philips stood to gain $2.8 billion in cash. The current deal offers the unit at a discount, but may have a better chance at success since Apollo is U.S.-based, Philips CEO Frans van Houten told Bloomberg.
“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,” van Houten said in the statement. “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.”
Philips has been plotting to shift into health tech for years, first saying in September 2014 that it would hive off its Lighting business through an IPO or a sale. Lumileds was created in 2014 as a standalone company that supplies lamps to the auto industry. Philips’ general Lighting unit spun off earlier this year, raising $839 million in an IPO that valued the business at nearly $3 billion.
By Amirah Al Idrus
Source: Fierce Biotech
Giovanni Caforio, the former CEO of Bristol Myers Squibb, is set to become the next board chairman of Novartis, which on Tuesday proposed the pharmaceutical industry veteran as its pick to replace Joerg Reinhardt in the role next year. Reinhardt has served as Novartis’ chair since 2013 and plans to retire when his 12-year term ends in 2025.
GE HealthCare has raised the curtain on two ultrasound systems equipped with artificial intelligence programs designed to assist in diagnosing conditions in women’s health, including obstetric exams. The Voluson Signature 20 and 18 imaging systems include AI tools capable of automatically identifying and annotating measurements of fetal anatomy.
Scientists from the University of Edinburgh’s School of Chemistry have revealed a new sustainable method of manufacturing complex molecules that could reduce waste produced during drug production. The method published in Nature Chemistry could help to prevent severe side effects caused by drugs that can exist as enantiomers.
