Philips buys out Lumileds as Agilent cashes chips
Lighting pioneer Royal Philips Electronics is to buy Agilent Technologies' 47% share in the LED manufacturer Lumileds for €765 million ($948 million) in cash.
The deal, which will mean that Philips owns 96.5% of Lumileds, is part of Aglient's wider plan to sell off its entire semiconductor business unit, which also includes GaAs IC, fiber-optic component and low-brightness LED manufacturing facilities.
Private equity firms Kohlberg Kravis Roberts and Silver Lake Partners are expected to take control of the remaining semiconductor business in a deal worth about $2.6 billion in total, according to reports in the Wall Street Journal online.
Founded in 1999 as a joint venture between the two companies, Lumileds makes LED chips, packaged LEDs and is perhaps best known for its high-power Luxeon light sources.
And it is this high-power segment for lighting applications that Philips is primarily interested in. "This extends our involvement across the LED value chain," said Gerard Kleisterlee, the president and CEO of Philips. "[We now] have the full value chain under our control."
Theo van Deursen, the CEO of Philips Lighting, said that the Lumileds acquisition was of "huge strategic importance" to the Dutch company. He also extolled the virtues of LED-based lighting for tempting shoppers and in medical applications.
But it is the general illumination market that is the critical one for Philips. "We see this as a long-term growth market and we are going to invest in innovation," added Kleisterlee.
The LED manufacturer's history is rooted in Hewlett-Packard (HP), where it began life as HP's optoelectronics division.
That division became part of Agilent Technologies when HP split into two businesses in 1999.
Now headquartered in San Jose, CA, Lumileds employs 1760 people globally. Company sales grew 28% in the fiscal year ending July 2005 to reach $324 million, says Philips.
