Philips announces one of the largest spinoffs in IT history.
Philips today announced that due to increased pressure from its board of directors, the company will be looking to launch an IPO for its semiconductor division. Philips said that it will play a lesser role in the semiconductor business and is looking for a way to give greater margin to its shareholders. Philips had already announced in late 2005 that it would legally separate its semiconductor business from the rest of its portfolio.
While diversifying one’s portfolio is common for technology companies, Philips said that it will take a lesser role in the semiconductor business to develop a greater focus and strengthen its core businesses. From the press release:
In a letter e-mailed to employees today Philips’ President and CEO Mr. Gerard Kleisterlee, wrote: “In the course of these last few months hundreds of Philips people have been working long hours on issues relating to the disentanglement of Semiconductors, while a small top team has worked on the pursuit of the different strategic alternatives. Both projects are well on track and in the process we have been able to define more clearly the next steps we will make and the outcome that will result in, both for Philips as well as Semiconductors.
Philips is currently working out the details but said in a report that it hopes to create an independent semiconductor that will function on its own. The new company, which has not been named, will focus on automotive, mobile, home and identification technologies. Philips also said that preparations for a separate stock exchange have already been started. In another press release, Philips indicated that it hopes to have the new company up and running by the third quarter of this year.
Just recently, Philips was on the forefront of digital home technology. As DailyTech reported, the company recently announced that it would put effort into high-bandwidth 802.11n products and devices for the home entertainment segment. Philips plans to make 802.11n the standard for streaming high-definition video and audio across devices. The Philips Nexperia line of semiconductors is also quite prominent in optical storage design.
News source: DAILYTECH