Philips to sell off monitor biz to TPV, assures unchanged Indian operations

Royal Philips Electronics has announced that it would be selling off its OEM
monitor business to TPV Technology, the world's second largest manufacturer of
CRT monitors. As part of the deal, TPV will take over the responsibility of
manufacturing the monitors, while Philips will continue with marketing and sales
of its own branded monitor and flat TV products. Philips is buying over 30% of
TPV Technology. The whole deal is billed at approximately $2 billion and will
help TPV become the world's largest PC monitor manufacturer, ahead of Samsung.
With this partnership, TPV will have stronger R&D capabilities, wider
geographical reach, improved purchasing power and ability to address the flat TV
market. Philips will have an advantage of increased development efficiency,
which will result in having competitively priced PCs and flat TVs.

However, Philips India officials have assured that despite this development,
nothing really changes for the operations here. "Business for Philips India
will continue as usual. If at all, it will only become stronger since Philips
will now be able to leverage on strong manufacturing capabilities of TPV,"
said Ankan Biswas, GM, Philips India. According to him, Philips has been
consistently increasing its marketshare in India and such a development will
help the company get more competitive. Philips' competitive position in the
strategic display area of PC monitors and entry-level Flat TV will be
strengthened by lowering costs in supply chain management and manufacturing of
the partnership with TPV.

The deal which is expected to close by mid-2005 will see Philips transferring
two of its OEM units in China, and one each in Taiwan, Hungary and Brazil. The
company has also asserted that by taking such a step, it would be able to 'focus
its efforts on innovation and product breakthroughs as well as on brand- and
channel management'.

According to Sanjay Maheshwari, Head-Distribution (PCP), Philips India,
channel partners will not see any difference in the way business gets conducted
and will continue to receive support as usual.

GOLDIE