Lighting Business of Philips
Posted: 04/28/2016 12:04:27   Edited: 04/28/2016 12:04:27  Clicks: 1041
On April 25, Dutch company Royal Philips (Royal Philips NV) announced that because since 2016 the situation of the securities market and market financing have improved, the Philips will choose to deal with the lighting business through the IPO, rather than private sale to specific vendor. In other words, Philips has a bigger chance not to sell the lighting business, however it hopes to create a higher market value for Philips lighting business through the investment of different parties of the stock market investors.
Philips also announced that although there are still different vendors biding proposal project for Philips lighting, the company will still plan for the IPO. Philips even said that regardless what the outcome would be, it will announce in the short term.
But investors seem ungrateful to Philips. Philips share dropped more than 4% on that day. After all, if Philips wants to make its IPO lighting career, one year or even more time is needed to make lighting project. That means the investors who hold Philips stock can not immediately get the profit after they sell the stock.
From another perspective, if Philips doesn't sell lighting business, but go for IPO, despite many manufacturers from Asia including China who proposed price proposals before, or vendors from other regions want to get the Philips lighting business which is the important key asset of Philips, they have to start from other ways. Buying shares from the open market could accord with Philips current strategy. Philips meant to sell lighting business, and focus on the health care business, which has much higher profit. This is why Siemens Group and American GE compete so severely in this field.
Philips lighting also announced that the tax expenses arising from lighting business will influence the company's profit in the first quarter of 2016. The net profit is estimated to be 37 million Euros, declining by 63% over the same period in 2015. Revenue has decreased by 3%, but it has still reached 5.5 billion Euros.
GH-LED points out, if Philips does not directly sell lighting business, it probably has other choices, including making profit from traditional lighting business, or from the integrated project of lighting system. In the application of new technology, lighting technology and LED components development, Philips still have more follow-up arrangements. So it sold the lighting business not only because the getting-better stock market and easier-raising fund, but for wider consideration.

Lighting Business of Philips

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