Philips, TPV ink pact on display-biz deal

Taipei, June 24, 2005 (CENS)--Royal Philips Electronics and TPV Technology Ltd. Have signed an agreement on sales of the formers monitor and entry-level flat-screen television business to the latter.

Under the pact, TPV will take over Philips' existing original equipment manufacturing (OEM) monitor business and produce monitors and entry-level flat TV products that Philips will continue to market and sell under its own brand. The combination of TPV and Philips' monitor and entry-level flat TV business will create a global leader in the monitor and flat TV assembly market. TPV will become the world's largest PC monitor manufacturer with annual volume well exceeding 35 million units.

The business transfer from Philips to TPV was estimated at some US$ 2 billion, or 1.6 billion euro at current exchange rates. This includes the transfer of 750 million euro sales of OEM monitor business to TPV and 850 million for the outsourcing of Philips-branded monitor and flat TV products. Philips will become a substantial shareholder of TPV.

TPV was established in 1990 in Fujian, Guangdong Province, mainland China and the company's holding company went public in both Hong Kong and Singapore, in 1999. Currently, BOE Technology Group Co. Ltd. Of China is TPV's largest shareholder.

In conjunction with the transaction with Philips, TPV will issue 68.33 million new shares (valued at 316 million Renminbi) in exchange of 21% of TPV shares held by BOE. BOE, after the stake sales, will remain the largest shareholder of TPV with a 24% stake, while Philips will be the No. 2 shareholder of TPV with a 15% stake. TPV, as a result, will be the supplier of Philips-branded monitors and LCD TVs.

TPV currently runs three plants in China, including in Beijing, Wuhan (Hubei Province), and Fuqing (Fujian Province), while Philips operates two production bases in the same nation, including Suzhou (Jiangsu Province) and Dongguan (Guangdong Province). After the tie-up, TPV will own five production bases in China and develop a more comprehensive global business deployment.

All of Philips' Magnavox-brand plasma display panel (PDP) and LCD TVs sold in the U.S. market will be contract supplied by TPV. Part of Philips-branded, under-29-inch monitors sold in Asia-Pacific and the U.S. will also be supplied by TPV. In the European market, Philips will sell the said products shipped from its plant in Hungary.