Philips and tpv sign agreement on television joint venture(1/11/2011) - China Ribbed V Belt

This result includes separation costsof approximately EUR 100 million. "I am pleased that we have now signed the Television jointventure agreement with TPV. This agreement is important for bothPhilips and TPV and provides clarity to our consumers, tradepartners and employees," said Philips Chief Executive OfficerFrans van Houten. "This joint venture leverages the strengthsof both companies to improve the position of Philips Television inthe market. It enables Philips to focus on expanding marketleadership positions across our Healthcare, Consumer Lifestyle andLighting sectors." "This partnership is an important step in realizing ourgrowth ambitions in the TV space," said TPV Chairman andChief Executive Officer Jason Hsuan.

"The joint venture is anextension of our ongoing relationship with Philips for many yearsand we are confident that together we can become a major player inTelevision globally." The joint venture will be responsible for the design,manufacturing, distribution, marketing and sales of Philips"Television worldwide, with the exception of mainland China, India,United States, Canada, Mexico and certain countries in SouthAmerica. As part of this transaction, the Philips Televisioninnovation and manufacturing sites, commercial organizations,headquarters and employee base of 3,500 will be transferred intothe joint venture. Key Terms and Conditions of the Transaction •Philips will grant the joint venture the right to use thePhilips brand for an initial term of five years with an automaticrenewal for another five years, subject to the joint venturemeeting certain key performance indicators. •As of the second year of the license term, the annual royaltypayable will be 2.2% of sales with a minimum of EUR 50 million peryear.

•Upon completion of the transaction, TPV will obtain 70% ofthe shares in the joint venture for a deferred purchase price. Thisprice will be calculated as 70% of an amount equal to four timesthe joint venture"s average annual EBIT. This right can beexercised at any time as of three years from the completion of thetransaction. In addition, at any time after six years fromcompletion, Philips has an option to sell the remaining 30%shareholding in the joint venture for a consideration calculated as30% of the same formula. •Both shareholders will provide funding to the joint ventureon a pro-rata basis.

This consists of a EUR 100 million equitycontribution and EUR 170 million subordinated shareholder loans.Depending on the funding need of the joint venture additional EUR200 million senior shareholder loans can be made available. •Given that pre-closing customer receivables will remain withPhilips, Philips will provide a nine-month EUR 100 million seniorbridge loan to the joint venture. Any potential extension beyondthe nine months of this loan will be on a pro rata basis. •Philips will provide a EUR 100 million subordinated loan toTPV. •Within the first two years, Philips will provide EUR 185million one-off advertising and promotion support for the TVbusiness as an investment in the Philips brand.

This amount is partof the deal result. The process of disentangling the TV business from the rest ofConsumer Lifestyle is progressing well and according to plan. Visit our featured links Visit our sponsors and showcases.

I am an expert from auto-drivebelts.com, while we provides the quality product, such as China Ribbed V Belt , Cogged V Belt Manufacturer, Cogged V Belt,and more.

Related Articles - China Ribbed V Belt, Cogged V Belt Manufacturer,

Email this Article to a Friend! Receive Articles like this one direct to your email box! Subscribe for free today!