Philips looking to decrease stakes in NXP, LG.Philips LCD

By Colleen Taylor, Contributing Editor -- Electronic News, 7/16/2007

More streamlining is in store for Dutch technology giant Royal Philips Electronics NV. The company today affirmed it is looking to sell off more of its remaining stakes in NXP Semiconductors and its LG.Philips LCD  joint venture.

Philips currently holds a 19.9 percent stake in NXP and a 32.9 percent stake in LG.Philips LCD.

In a conference call with press and analysts this morning, Philips' CFO Pierre-Jean Sivignon confirmed months of rumors by saying that the company would indeed like its stake in LG.Philips LCD to go "below 20 percent" after mid-July. Philips has been involved in the joint venture since 1999, when it spent $1.6 billion to buy a 50 percent share in LG's LCD business.

As for NXP, which had been a fully owned subsidiary of Philips before its private equity-funded spin-off from the company in September 2006, Sivignon said that Philips will be "opportunistic" in regards to a possible sale of its remaining stake. "NXP is not one of our priorities," Sivignon added.

Also today, Philips announced its fiscal Q2 financial results, with net income of $2.14 billion (1.56 billion Euros), more than five times its Q2 2006 income of $414.4 million (301 million Euros) due mostly, Philips said, to its sale in May of $2.5 billion of its stake in foundry giant Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) in which it now holds an 8 percent stake. Philips Q2 sales were $8.4 billion (6.1 billion Euros), down 4.3 percent year-over-year.