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KB3001
Philips is making short term gains by getting rid of these fluctuating shares ...
spingal
I heard Philips CTO say in a plenary talk a couple of years back that they were ...
Philips to 'give away' $450m stake in NXP
Peter Clarke
9/7/2010 6:17 AM EDT
LONDON – Koninklijke Philips Electronics NV has announced it is selling its entire stake in NXP Semiconductors BV, formerly its chip making division, nominally worth about $450 million. However, Philips will be providing the cash for the sale.
Philips (Amsterdam, The Netherlands) said it would make a cash contribution of 350 million euro (about $450 million) to the Philips UK pension fund, as part of a recovery plan for the fund. The trustees of the fund would then use the money to purchase Philips' entire stake in NXP (Eindhoven, The Netherlands). This was 19.9 percent of NXP prior to dilution due to an initial public offering of shares in June (see Interview: NXP's Clemmer on IPO, future challenges)
The sale of the NXP shares will lead to a nominal 140 million euro (about $180 million) gain from the recorded value of the stake that Philips will report under financial income in the third quarter of 2010, Philips said.
Related links and articles:
Europe's NXP pay out misses the PE point
NXP profits in Q2, capacity is limited
NXP prices IPO at $14 per share
Philips (Amsterdam, The Netherlands) said it would make a cash contribution of 350 million euro (about $450 million) to the Philips UK pension fund, as part of a recovery plan for the fund. The trustees of the fund would then use the money to purchase Philips' entire stake in NXP (Eindhoven, The Netherlands). This was 19.9 percent of NXP prior to dilution due to an initial public offering of shares in June (see Interview: NXP's Clemmer on IPO, future challenges)
The sale of the NXP shares will lead to a nominal 140 million euro (about $180 million) gain from the recorded value of the stake that Philips will report under financial income in the third quarter of 2010, Philips said.
Related links and articles:
Europe's NXP pay out misses the PE point
NXP profits in Q2, capacity is limited
NXP prices IPO at $14 per share
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kinnar
9/7/2010 10:42 AM EDT
Does it mean that philips is comming out of Semiconductor Businnes completely?
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Baolt
9/7/2010 12:08 PM EDT
IF u jus google NXPI youd see story of nxp shares, since they are revealed with 14$ value per share now it was around 11$. Just think you are Philips, ex owner of your semicon. co. You see that after you sell them to private equity group, your precious co. melt. Now its in the public going downwards. In order to protect your remaining $s you want to get rid of the shares u own, yet still keep ownership of co. U simply swap your shares and make an investment for your pension fund. Like that ur $s are safe and memories either. If NXP will remain strong in far future u may get your $s back. Exactly suitable thought for fund logic, Clever move from philips, isnt it?
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Kaiser Silicon
9/7/2010 1:55 PM EDT
At least they aren't strangling a child company like Infineon did with Qimonda.
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Neo1
9/8/2010 1:58 AM EDT
Philips, a name to reckon a decade back now is halfway to flipping. What happened, they were also rumored to exit the consumer market a while back with chronically weak sales compared to others like Samsung, LG, Sony, etc. And now this NXP in transition. At least their embedded market is still healthy I suppose, but their bets on big time $$ as far as new gadgets like smart phones, tablets, etc has failed to take off.
But they are one of few who can re-invent themselves.
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Rich Krajewski
9/8/2010 2:28 AM EDT
"Philips to 'give away' $450m stake in NXP"
Can I just have the cash, instead?
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CamilleK
9/8/2010 3:45 AM EDT
The key point is that Philips is shoring up a pension fund that needed recovery measures(and that may have needed their help regardless of the giveaway). By doing this, Philips is making the pension fund healthier for the future liabilities of the fund, gets to record a short term profit, and cashes in on an already diluted position of NXP ownership which would make any appreciation of NXP stock less attractive and substantial to Philips. I would say this is a win-win smart move.
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spingal
9/8/2010 9:22 AM EDT
I heard Philips CTO say in a plenary talk a couple of years back that they were a Health and Lifestyle company. Philips Healthcare for years has been their biggest profit generator and you can describe Lifestyle as you wish, but it still contains Consumer. For sure Philips exited the chip business since it was no longer core to its future strategy.
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KB3001
9/9/2010 6:06 PM EDT
Philips is making short term gains by getting rid of these fluctuating shares from their balance sheet, and at the same time long term gains by shoring their ailing UK pension fund with these same shares. In short, Philips is uncertain about NXP's short term prospects but quite confident about its long term prospects.
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