Historical restructuring at Philips

The Dutch producer of electrical and household appliances, Philips, has announced today that it will split medical equipment and household production department from lighting production department which is a dramatic step in the company 120 years old.

- We are preparing Philips for the next century. We will thus enable our lighting business to strengthen its global leader position and to exploit new market opportunities. We are aware of the importance of the decision but it is time for the next strategic step – CEO, Frans van Houten, said and France press reported.

The Dutch company’s shares increased by 3, 26% to EUR 24, 27 after the new was published. Both new companies will operate under Philips’s name and will be headquartered in the Netherlands. Medical equipment production department, HeltTek, last year generated EUR 15 billion and bulbs and lighting department came at EUR 7 billion. The value of HeltTek is estimated at more than EUR 100 billion and lighting department is estimated at EUR 60 billon.

Philips was set up in1891 and employs around 112.000 people worldwide. The company division came after the German technological giant, Siemens, last year split business of its branch office, Osram, for bulbs production.

Philips, Osram and General Electrics are facing strong competition such as Samsung and LG in the times when the market is turning to energy-saving bulbs.