Lighting giant Philips has announced that it will not sell an 80% stake of its wholly-owned LumiLEDs business to the Chinese consortium led by GO Scale Capital.
The Committee on Foreign Investment in the United States has not approved the deal that was valued at $2.9 billion.
”I am very disappointed about this outcome as this was a very good deal for both Lumileds and the GO Scale Capital-led consortium. This outcome does not, however, impact the fundamentals of the Lumileds business,” said Frans van Houten, CEO of Royal Philips.
“Lumileds is a highly successful supplier of lighting components to the general illumination, automotive and consumer electronics markets with a strong customer base. We will now engage with other parties that have expressed an interest in exploring strategic options for Lumileds to pursue more growth and scale. I would like to extend my appreciation to GO Scale Capital for having been a deeply committed partner to Philips during the transaction process.”
The Amsterdam-based company has been trying to offload some of its lighting business in order to focus on its more profitable health and consumer products businesses.
“The termination of the transaction with GO Scale Capital does not involve a break fee nor impact the separation process of the remaining Lighting business from Royal Philips, which is being pursued as an independent transaction. Philips will continue to report the Lumileds business as discontinued operations,” Philips said.
LumiLEDs has operations in over 30 countries and nearly 9,000 employees all over the world.
The business generated sales of approximately USD 2 billion in 2015.