(Associated Press via NewsEdge) Royal Philips Electronics said it has agreed to sell an 80.1% stake in its semiconductor unit to a private equity group for 6.4 billion euros ($8.2 billion).
The consortium, made up of US-based private equity firms Kohlberg Kravis Roberts, and Silver Lake Partners along with Dutch-based AlpInvest Partners NV, will buy the stake while Amsterdam-based Philips will retain the rest of the business, Philips said in a statement.
The deal includes the assumption of 4 billion euros ($5.1 billion) in debt, and values the 19.9% stake Philips is keeping at 900 million euros ($1.15 billion).
After taxes and fees, Philips said it expects to clear about 6.4 billion euros ($8.2 billion) cash from the sale.
Philips was the world's ninth largest maker of semiconductors by sales last year.
'This is a defining moment for both Philips and its semiconductors business,' Philips president and CEO Gerard Kleisterlee said. 'As a stand-alone company, the semiconductors business will have every opportunity to realize its full potential and we are very pleased to have found strong partners that share our belief.'
Kleisterlee said that the sale will allow Philips, best known for its consumer electronics products, to 'fully focus' on its health care and lifestyle products.
c 2006 The Associated Press
c 2006 Dialog, a Thomson business. All rights reserved