Philips Electronics has reached an agreement in principle to sell its Set-Top Box (STB) and Connectivity Solutions (CS) businesses to Pace Micro Technology in exchange for 70 million Pace shares. The proposed transaction is subject to approvals from Pace shareholders, the relevant regulatory authorities and Philips' workers council.
Assuming the deal is completed, Philips will become a 23% shareholder in the combined business, representing a market value of around EUR 90 million calculated with the closing price of Pace shares on December 18. The transaction is expected to close in the first quarter of 2008.
Commenting on the sale, Philippe Alcaras, Business Unit leader Philips Home Networks said: "We feel that the rapidly changing dynamics of the markets in which the STB and CS businesses operate will inevitably culminate in further industry consolidation. By striking a deal with Pace now, we gain the first-mover advantage and it shows Philips' determination to secure a leading role for our businesses, and make them even more relevant to our customers and technology partners."
Generating estimated revenues of EUR 425 million in 2007, the STB and CS businesses employ around 335 people, predominantly based in France.
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