In a multi-million dollar move, the far Eastern firm of TPV Technology is to take over Philips’ existing OEM monitor businesses.
Under the terms of a recent deal between the two firms, Philips monitor and flat TV activities in Suzhou and Dongguan (China), as well as its monitor activities in Szekesfehervar (Hungary) and Manaus (Brazil) will be transferred to TPV. As will Philips’ OEM sales organization and development centre in Chungli (Taiwan).
The move will leave Philips to concentrate on the development and manufacturing of flat TVs for the mid and high-end segments as well as on the marketing and sales of both PC monitors and flat TVs globally under the Philips brand and affiliated brands.
Upon completion of the transaction, TPV will become the world’s largest PC monitor manufacturer with annual volume exceeding 35 million units; it will become the preferred supplier to Philips for its branded PC monitors and entry-level flat TVs.
Philips will maintain its branded monitors headquarters in Taiwan, its regional sales organizations serving branded display products as well as its flat TV development centres in Bruges (Belgium) and Singapore.
Philips will also continue TV production in Dreux (France), Bruges (Belgium), Szekesfehervar (Hungary), Juarez (Mexico), and Manaus (Brazil).
Philips will also become a substantial shareholder of TPV. Philips and TPV have agreed that Philips’ contribution to TPV represents and is valued at 30% of the enlarged market capitalisation of TPV; this will be settled by 15% newly issued shares in TPV and the remaining value by way of a convertible bond. Based on the 15-day volume weighted average price of TPV prior to signing, the transaction is currently valued at approximately $358 million.
In a separate move, TPV signed an agreement with BOE, TPV’s largest shareholder, to acquire BOE’s current holding in TPV’s 41.7% owned associate, Beijing Orient Top Victory Electronics Company Limited (OTPV), with the aim of consolidating all OTPV assets into TPV Technology.
The transaction is expected to be completed by mid 2005.