Royal Philips has reached out to Chinese rivals to gauge their interest in acquiring its home appliance unit, which could fetch as much as US$4-billion, people with knowledge of the matter said.
The Amsterdam-based company has approached fellow white goods manufacturers Haier Group and Midea Group ahead of a formal sale process expected to start in the fourth quarter, the people said, asking not to be identified as the information is private.
Philips is contacting Turkish household appliance makers Arcelik and Vestel as well to test their appetite for a deal, one of the people said. Buyout firms Blackstone Group, CVC Capital Partners and KKR & Co are also expected to study the business when the sale kicks off, according to the people.
When Philips was selling its Lumileds lighting components division about five years ago, the business attracted interest from private equity firms including Apollo Global Management, Bain Capital, CVC, KKR and Onex, people familiar with the matter said at the time.
Representatives for Blackstone, CVC, Haier, KKR, Philips and Vestel declined to comment. A spokesman for Midea wasn’t immediately available for comment. A representative for Arcelik said the matter isn’t on the company’s agenda for the moment, without elaborating.
‘Solid business’
Philips said in January it plans to sell its home appliances unit, which produces everything from coffee makers to air purifiers and generates revenue of €2.3-billion. The potential disposal forms part of CEO Frans van Houten’s efforts to revamp Philips into a focused health-care equipment maker.
The CEO said on an earnings call Monday that he expects a sale to be completed in the third quarter of 2021.
“This is fundamentally a solid business with market-leading positions and we expect to engage with interested parties after the summer,” van Houten said. — (c) 2020 Bloomberg LP