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Philips agreed in December 2006 to sell the manufacturing operations of its Automotive Playback Modules (APM) business to Taiwan’s Lite-On IT Corporation. The deal centered on APM’s plant in Győr, Hungary—not the whole business: development, sales, marketing, and product management were to move into a new Philips–Lite-On joint venture, while BenQ left Philips’ existing digital-storage venture.
What Philips sold to Lite-On
Royal Philips Electronics announced the agreement on December 28, 2006. APM developed, manufactured, and supplied CD and DVD playback modules used by suppliers of automotive entertainment systems. Lite-On was buying the manufacturing operations, located mainly in Győr, Hungary; Philips did not disclose the purchase price in its announcement. Philips’ announcement
That scope matters: this was not an announced sale of every APM function or of Philips’ broader optical-drive business. APM’s research and development, marketing and sales, and product management were primarily based in Wetzlar, Germany, and were slated to transfer to a new joint venture.
How the deal changed the digital-storage venture
The remaining APM activities were to join Philips & BenQ Digital Storage (PBDS), the existing venture between Philips and BenQ. Lite-On replaced BenQ as Philips’ partner, and PBDS was to be renamed Philips & Lite-On Digital Solutions (PLDS). BenQ therefore exited the venture as Lite-On entered it.
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PLDS was expected to continue developing, marketing, and selling DVD burners and optical drives for automotive use. Manufacturing would be outsourced to Lite-On IT and other third parties. In practical terms, the announced arrangement separated the continuing product and commercial functions from the manufacturing operations Lite-On acquired.
Why Philips sold the manufacturing operations
Philips characterized APM as a non-core activity within its Corporate Investments portfolio. It said the move supported its focus on Healthcare, Lifestyle, and Technology. The company put the rationale this way: “This transaction represents another step Philips is taking to focus on its Healthcare, Lifestyle and Technology activities supported by the strength of the Philips brand.” Philips, December 28, 2006
The deal also gave Lite-On a manufacturing role and a place in the continuing joint venture. The announcement described the strategic division of responsibilities, but did not quantify expected savings, future revenue, or other financial benefits.
Price, reported workforce, and what is confirmed
Philips’ announcement did not state a sale price. A 2007 CDRInfo report put consideration for the Győr car CD/DVD manufacturing operations at $55–56 million and reported that about 1,600 people worked at the operation. These are secondary trade-report figures, not numbers disclosed in the original Philips announcement. CDRInfo’s 2007 report
The same CDRInfo report said Lite-On paid BenQ $7.96 million for BenQ’s 49% stake in the joint venture. That is a separate reported payment for the venture stake, not the price Philips disclosed for the Győr manufacturing operations. Philips’ announcement gave no purchase-price figure for its transaction.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.When the transaction was expected to close
Philips said the transaction was expected to close in March 2007, subject to customary regulatory approvals and other conditions. In February 2007, the European Commission cleared Lite-On’s entry, concluding that it would not significantly impede effective competition and that customers would retain alternative sources of supply. European Commission clearance notice
The March date was an expectation in the announcement, rather than an unconditional completion date. The cited Philips release and Commission notice establish the planned timing and regulatory clearance; they do not by themselves provide a final closing date.
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