Philips Sells Its Mobile Division

Philips Electronics decided to sell its mobile division and has signed a letter of intent to transfer all of its remaining Mobile Phone activities to China Electronics Corporation (CEC).

China Electronics Corporation (CEC) engages mainly in four business fields: semiconductor, computer software/hardware & system integration, telecommunication network & terminals, and digital home appliances. Its business activities cover the complete value chain of the industry, including R&D, design, manufacturing, application, marketing & distribution and technical service.

CEC will take over the responsibility for Philips' Mobile Phones business, which seems to currently have an annual turnover of approximately EUR 400 million and almost 240 employees, mainly in Asia Pacific and Eastern Europe. Under the terms of the letter of intent, CEC will receive a global license to market and sell mobile phones under the Philips brand for the coming five years.

This will be the third Division that Philips sells after the Semiconductor and the Enabling Technologies Group Divisions in just 3 months. The transaction is still subject to confirmatory due diligence, and it is expected to be completed by the end of 2006.