Doubt clouds Philips TV sale


PHILIPS Electronics has all but abandoned hope of selling its loss-making TV business by the end of the year and is considering its options should the deal collapse.

Chief Executive Frans van Houten said: "The global TV market has deteriorated, and obviously the sooner we complete this the better, but we first need to finalize the negotiations, and whether we can do that this year or into the first quarter of 2012, there are some uncertainties."

Philips said it would aim to cut 4,500 jobs as part of a restructuring scheme to boost profits and meet its financial targets. The number is about 3.7 percent of its non-TV workforce of just over 120,000, which had already been reduced by a 2009 program to cut 6,000 jobs.

Philips - the world's biggest lighting maker, a top-three hospital equipment maker, and Europe's biggest consumer electronics producer - said negotiations to sell most of its TV business to Hong Kong-based monitor maker TPV were intense, constructive and taking longer than expected.

Van Houten said the companies were still negotiating, but that if negotiations were finalized, it could then take months to close a deal due to regulatory hurdles.

Both Philips and TPV said yesterday there was no agreed timeline for closing the deal.

Van Houten also said it was too early to outline a backup plan for the TV business, which makes up less than 10 percent of group sales and has gone from being a global leader to a thorn in the firm's side, having notched up almost 1 billion euros (US$1.38 billion) in losses since the beginning of 2007, when competition with lower-cost Asian rivals began to intensify.

"The TV negotiations are taking longer than expected and there is no final agreement," said Rabobank analyst Hans Slob. "That Philips says the negotiations are intense does not sound very good, and it looks like there is a clear chance they will not strike a deal."


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