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US Regulator Blocks Philips’ Deal to Sell Lumileds Division

AMSTERDAM, the Netherlands (AP and Philips) — Philips says the planned sale of a majority stake in its LED components and automotive lighting division to a consortium led by investment fund GO Scale Capital has been scrapped after the two sides failed to get clearance from U.S. regulators.

Despite its extensive efforts, Philips announced Friday that the Committee on Foreign Investment in the United States (CFIUS) has not approved the deal for an 80.1% stake its Lumileds division that was worth up to $2.9 billion.

“I am very disappointed about this outcome as this was a very good deal for both Lumileds and the GO Scale Capital-led consortium. This outcome does not, however, impact the fundamentals of the Lumileds business,” said Frans van Houten, CEO of Royal Philips. “Lumileds is a highly successful supplier of lighting components to the general illumination, automotive and consumer electronics markets with a strong customer base. We will now engage with other parties that have expressed an interest in exploring strategic options for Lumileds to pursue more growth and scale.”

Lumileds has operations in more than 30 countries and employs approximately 8,800 employees worldwide. In 2015, it generated sales of approximately USD 2 billion.

The termination of the transaction with GO Scale Capital does not involve a break fee nor impact the separation process of the remaining Lighting business from Royal Philips, which is being pursued as an independent transaction.

Philips will continue to report the Lumileds business as discontinued operations.


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