Royal Philips have signed a term sheet to transfer its remaining 30% stake in TP Vision, the television joint venture with TPV Technology, to a fully-owned subsidiary of TPV. The signing of definitive agreements is expected to take place in the first quarter of 2014, with completion expected in the second half of 2014, subject to certain regulatory and TPV shareholder approvals. After completion, TPV will fully own TP Vision, which will enable further integration with TPV’s TV business.
“With this agreement, we are creating the right set-up for the business to be successful in the extremely dynamic and competitive TV market,” says Philips Chief Executive Officer Frans van Houten. “By giving TPV full control, they can drive synergies and act in a faster and more flexible way to changes in the market. Together with TPV, we remain committed to making the TV business a success, with a range of innovative Philips-branded TVs.”
The remaining 30% stake in TP Vision will be transferred for a deferred purchase price and all outstanding loans and stand-by facilities between Philips and TP Vision will be transferred to TPV. The brand license agreement between Philips and TP Vision will remain in place, with an annual royalty of 2.2% of sales payable by TP Vision to Philips. The minimum annual royalty has been reduced from EUR 50 million to EUR 40 million. The agreement includes a EUR 50 million transaction-related payment, the effect of which Philips will account for in the fourth quarter of 2013.