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Royal Philips NV (NYSE: PHG) is divesting its domestic-appliances unit to private equity firm Hillhouse Capital in a deal worth $4.4 billion (€3.7 billion) to accelerate its conversion into a healthcare equipment maker post exit from the consumer-electronics businesses, Bloomberg reports.
Philips expects cash proceeds of €3 billion upon deal completion by the third quarter.
CEO Frans van Houten initiated a string of health-related acquisitions to consolidate Philips’ telehealth and diagnostics portfolio and optimize costs for hospitals and clinics.
Philips completed the acquisition of remote medical technology company BioTelemetry, Inc (NASDAQ: BEAT) for $2.8 billion on February 9. Philips also acquired Capsule Technologies, a medical device integration and data technology for hospitals and healthcare organizations, for $635 million.
The company wants to focus on extending health technology leadership upon the divestment.
Philips finalized Hillhouse betting on the Asia-focused investor’s appropriateness for the appliances business. The divested business agreed to pay €700 million to keep using the Philips brand for 15 years. Philips’ appliances business had produced €2.2 billion in sales last year.
PHG stock has gained 61% in the last year.
Price action: PHG shares are trading higher by 0.95% at $56.39 on the last check Thursday.
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