In January 2020, Philips announced its intentions to sell its Domestic Appliances division. By September of that year, in the midst of the corona crisis, it revealed that despite the global economic downturn, the division was still in high demand as it courted perspective suitors. Now, six months further down the road, and with a total transaction value of nearly 4.4 billion euros, it appears that the medtech specialist is finally ready to formally close that chapter, as it announced the new home for the division – Chinese investment firm Hillhouse Capital.
The deal, which is expected to be completed in Q3 2021, puts the enterprise value of the Domestic Appliances business at approximately 3.7 billion euros. Philips will also receive an additional 700 million euros, stemming from a 15-year brand-licensing agreement. After taxes and transaction-related costs, the sale will put roughly 3 billion euros into the company’s coffers. In trimming this excess, Philips is looking to get back to work, focusing on health technology.
“I’m pleased that in Hillhouse Capital we’ve found a new home for the Domestic Appliances business to further expand on its market leadership, strong brand and pipeline of new innovations,” says Frans van Houten, CEO of Philips. “This transaction concludes our major divestments. Going forward, our focus is on extending our leadership in health technology and continuing our transformation into a solutions company supporting professional healthcare customers achieve the Quadruple Aim and consumers with their personal health.”