Philips turns off its appliances after almost a century

Philips ended yesterday what adds up to 95 years of experience in the home appliance industry with the sale of the Domestic Appliances business to the global investment firm Hillhouse Investment. The results of this transaction, which Philips announced on March 25, 2021, will be recorded as discontinued operations in the third quarter of 2021.

In exchange for the Domestic Appliances business, Philips has received cash proceeds, after tax and costs associated with the transaction, of approximately €3 billion. In this way, the transaction means valuing Philips’ Domestic Appliances business at approximately 3.7 billion euros.

Successful operation

But really, the total value of the operation carried out amounts to approximately 4,400 million, as a result of an additional brand license agreement with a duration of 15 years and with annual payments that represent an estimated net value of approximately 700 million euros.

Frans van Houten, CEO of Royal Philips, said: “I am pleased that, in accordance with our plans, we have completed this transaction and concluded our major divestitures.” “I am confident that the Domestic Appliances business will be able to extend its market leadership with the support of Hillhouse Investment. We are carrying out our strategy to deliver integrated solutions that help professional healthcare customers achieve the Quadruple Goal and consumers to take care of their health,” he adds.

“We are in an excellent position to continue to bring significant innovations to the consumer home in areas such as cooking, coffee, laundry and home care,” said Henk de Jong, CEO of the Domestic Appliances unit. Following the sale of the Domestic Appliances business, Philips’ €3.2 billion personal care business will continue to play a leading role in the company’s integrated health strategy through products and solutions that facilitate healthy lifestyles and disease prevention.

Long trajectory

As the company explains on its website, the foundations of what would later become “one of the largest electronics companies in the world were laid in Eindhoven, the Netherlands, by Gerard Philips, in order to manufacture incandescent lamps and other electrical products”. 35 years later, Philips is incorporated in Spain. Since then, the brand has supplied and accompanied generations of families who decided to trust its products.

In its early years, the Philips Ibérica Society was dedicated “to the import and sale of products from its Dutch headquarters”. A few years later, specifically in 1929, Philips Radio would be created, a section of Philips that would influence the broadcasting market.

Luis Muntadas Rovira, founder of the Spanish Society of Electric Lamps “Z” (Selez), marked a before and after in the presence of the brand in Spain since thanks to him imports would no longer be necessary. Little by little, Selez was expanding its industrial production. 10 years later, with the advent of television, they began manufacturing picture tubes, with Selez being the producer of all Philips own components.

In May 1959, the first installation to manufacture ferrites was inaugurated in the premises of the Free Zone, where the following year he also founded Miniwatt, SA, dedicated to the manufacture of electronic components. In 1969, the manufacture of ferrites moved to the new Hispano Ferritas, SA (Hispafer) factory in Guadalajara. During the 1970s and 1980s, Philips underwent a deep organization of the commercial area and its network of branches and distributors reached all parts of Spain, even opening branches in the main cities of the country.

Currently, it is a leading company in health technologies. According to the latest available data, it has registered sales of 19.5 billion in 2020 and employs approximately 82,000 workers, with commercial operations and services in more than 100 countries.