Philips has officially ditched its lifestyle entertainment business, offloading it to Funai in Japan so it can concentrate on its kitchen, lighting and baby products ranges.
Although the Philips name will still be on the front of the box, like the company's TV range, the Dutch company will licence the brand to Funai so it can manufacturer all its DVD players, audio products, speaker docks and hi-fi systems.
"Under the terms, Funai will pay a cash consideration of 150 million euros and a brand licence fee, relating to a licence agreement for an initial period of five and a half years, with an optional renewal of five years," says Philips.
The deal for the audio, multimedia and accessories businesses is expected to close in the second half of 2013.
“I am confident that today’s agreement with Funai, our partner for over 25 years, will create a promising future for Philips audio, video and entertainment, and continuity for our customers,' said Frans van Houten, Philips CEO, in a statement.
"It will leverage Philips’ strong brand, strength in innovation, and leadership position in these businesses, with Funai’s strong presence in North and Central America - and Japan - and its supply and manufacturing expertise."
Funai is fairly unknown in the UK consumer electronics space, but will now be one to watch.
The wideo business will transfer in 2017, related to existing intellectual property licensing arrangements.
The audio video multimedia products include all home audio, headphones, speakers, in-car audio, video-related products, portable video players, home media players, and DECT phones. It will also include Philips' range of batteries, power adapters and antennas.
In 2008 Funai agreed to license Philips TV business in the US and Canada.