The Lumileds and automotive businesses are being combined to form a standalone company for which Philips will seek outside investment, while remaining a shareholder and customer.
Lumileds CEO Pierre-Yves Lesaicherre will serve as chief executive of the new business.
CEO Frans van Houten said: ‘Philips’ strategy in lighting is to intensify its focus on connected LED lighting systems and services, LED luminaires, and LED lamps for the professional and consumer markets. Both our Lumileds and automotive lighting businesses are strong players in the lighting industry and ready to pursue more growth and scale, independently of Philips Lighting.’
Eric Rondolat (pictured), CEO of Philips Lighting, said: ‘I am confident that the combined business will be able to extend its leading portfolio of digital lighting components and achieve robust growth, serving even more customers in the industry, including of course Philips Lighting.’
Sales for the two businesses amounted to €1.4 billion ($1.9 billion) in 2013, with the lighting division as a whole bringing in €8.4 billion ($11.5 billion).
The merger of the two divisions is expected to be completed in the first half of 2015.