TPV eyes TV market after Philips buyout
TPV Technology, the world's largest contract manufacturer of personal computer displays, has put on track its plan to become a television market leader after completing its takeover of Royal Philips Electronics' loss-making television business.
In a filing with the Hong Kong stock exchange yesterday, TPV chairman and chief executive Jason Hsuan said Philips agreed to pay a cash package totalling Euro206.4 million (HK$2.14 billion) and transfer its television business to a joint venture set up in November by the Kwun Tong-based firm and the Dutch electronics giant.
'We can become a major player in television globally,' Hsuan said of having Philips as a partner.
Their joint-venture firm, TP Vision, has its headquarters in Amsterdam, employs about 3,300 staff and is 70 per cent owned by TPV.
TP Vision is responsible for the design, production, distribution, marketing and sales of Philips-branded LCD television products worldwide, except on the mainland, in India, the United States, Canada, Mexico and certain countries in South America.
Philips chief executive Frans van Houten expects TP Vision to become 'a strong player in the global TV market and will ensure the continuity of the Philips TV brand'.
Once a leading brand in the television industry, Philips has seen its global market share decline over the past decade due to competition from more advanced and sleek liquid crystal display (LCD) products from top Korean and Japanese rivals.
Samsung Electronics, LG Electronics, Sony, Panasonic and Sharp were the world's best-selling flat-panel television brands in the fourth quarter last year, according to the latest rankings published last month by research firm NPD Display Search.
After the necessary merger clearance, governmental and TPV shareholder approvals were obtained, Philips agreed to make a cash payment of Euro121.795 million to TP Vision. The firm will use that sum to promote and market the Philips brand.
As part of a trademark licence deal, Philips will pay Euro50 million in cash to TP Vision in four equal quarterly instalments, starting in the second quarter next year.
Philips also agreed to pay Euro22.500 million in cash to TP Vision as compensation and support for its timely launch of a new product range.
An additional Euro12.1 million will become payable by Philips to TP Vision if the launch of the new range is later than currently anticipated by the joint-venture partners.
A fixed fee for information-technology services that TP Vision agreed to pay Philips was reduced by the Dutch giant to Euro6.795 million from the earlier contracted Euro20 million.
Despite difficulties last year, when global LCD television shipments slowed down to about 205 million units, Hsuan last month said TPV was well-positioned to grow its television business as the industry is forecast to increase shipments by 8 per cent to 220 million units this year.