Philips says sale of lighting unit in doubt
Dutch electronics giant Philips revealed Monday that the $2.8-billion sale of its lighting unit is in doubt because of US regulatory concerns, casting a cloud over news of better-than-expected profits.
Philips had announced seven months ago that it was selling a majority stake in its LED and car lighting arm, Lumileds, to a consortium led by China-based GO Scale Capital investment.
The deal had been expected to bring in $2.8 billion (2.5 billion euros) in cash for Philips, which last year announced it would focus on healthcare-lifestyle and split off its historic lighting section.
But US regulatory concerns have put the plan in doubt.
"In the course of seeking regulatory approvals regarding the sale of an 80.1-percent interest in Lumileds to a consortium led by GO Scale Capital, the Committee on Foreign Investment in the United States has expressed certain unforeseen concerns," the company said.
Philips and GO Scale Capital would take all "reasonable steps" to address the US concerns, it said, adding however that the closing of the deal was now "uncertain".
Philips, which sold its first light bulb a few years after it was founded in 1891, has for the past dozen years focused on medical equipment, which now accounts for more than 40 percent of sales.
The group revealed the hitch in the Lumileds sale even as it emerged from the red ink in the third quarter, reporting a net profit of 324 million euros compared to a loss of 103 million euros a year earlier.
Sales rose 12 percent to 5.84 billion euros, Philips said. On a comparable basis, excluding for example the impact of businesses that have been sold off, sales were up two percent, the company said.
"Philips delivered improved results for the third quarter of 2015, confirming that our operational performance continues to strengthen, despite deteriorating macro-economic conditions in a number of markets, most notably China," chief executive Frans van Houten said in a statement.
Healthcare sales were driven by the group's performance in North America, he said.
© 2015 AFP