Philips verkoopt BTS of Philips Broadcast aan Thomson, waarmee Nederlands enige televisiecameramerk verdwijnt.

Amsterdam/Paris, 4 December 2000 - Thomson Multimedia to acquire majority interest in Philips Professional Broadcast.

Royal Philips Electronics of the Netherlands and Thomson Multimedia of France have reached a preliminary agreement.

Royal Philips Electronics of the Netherlands and Thomson Multimedia of France have reached a preliminary agreement for the purchase by Thomson of five businesses of the Philips Professional Broadcast group, through a new holding company established by Philips.

Under the preliminary agreement, Thomson will immediately acquire 67% of a new holding company comprising the five businesses. Philips will have the right to sell its remaining 33% stake in the holding company to Thomson in two equal tranches on 1 January, 2002 and 1 January, 2003 respectively. Thomson Multimedia will have the right to call for Philips’ remaining 33% stake in one or two exercises at its election at any time. The first step of this transaction, which remains subject to regulatory and labor relations approvals, is expected to be completed in the first quarter of 2001. Financial details will not be disclosed.

The businesses - Cameras, Film Imaging, Signal Processing, Media Networking & Control, and Systems - had a combined turnover of approximately Euro 250 million in 1999, and have a total workforce of 1050 employees. The Philips Professional Broadcast group is currently an activity within the Specialty Products cluster of Philips Consumer Electronics.

The proposed transaction fits with Philips’ strategy to streamline its product portfolio around core competencies. Philips, via its Digital Networks business, will continue to focus on consumer product solutions and enabling technologies for the broadcasting market. The Digital Transmission Systems and SMATV businesses of Philips are not included in this transaction.

For Thomson Multimedia, this contemplated acquisition fits with its recently announced Digital Multimedia Solutions (DMS) strategy and will complement its existing professional broadcast activities, with a leading worldwide position and the intention of creating a strong worldwide leader for the broadcast hardware market. This ensures both customers and employees of ongoing continuity and commitment to this business.

The proposed transaction will strengthen Thomson’s DMS division, a new business segment focused on business-to-business solutions for broadcasters, content providers, network operators and advertisers aiming at deploying full digital video content solutions. It occurs after the recent creation of Nextream (a joint venture between Thomson and Alcatel), dedicated to the high growth Interactive Video Networks market.

Thomson Multimedia intends to eventually combine its own professional broadcast activities with the businesses acquired from Philips. Together they represent a total turnover estimated at Euro 366 million of sales in 1999, achieving leading positions for the advanced broadcast market. This business addresses the immediate and future needs of the video content providers and the broadcast industry thanks to a unique worldwide sales and system integration network present in more than 20 countries.

The customer portfolio comprises major broadcasters and networks, multi-channel operators, transmission and distribution operators together with production and post-production facilities. The business also seeks to exploit growth opportunities including the rapid migration by the broadcast industry to server-based network architectures, and the creation of integrated digital solutions, all creating a powerful end-to-end offering.

Tom Verbeek, CEO of Philips Specialty Products said: “Thomson Multimedia is acquiring a unique cluster of businesses which are top players in their respective markets. All benefit from strong synergies and bring unprecedented competitive advantages to the group as a whole.”

With its remaining broadcast related activities - principally Digital Networks - Philips will focus on enabling broadcasters to deliver exciting new content via digital delivery platforms. In particular, Philips will concentrate on the potential of convergence in the home, with the set-top box developing into a home gateway combining broadcast and Internet applications.

Thierry Breton, Chairman and Chief Executive Officer of Thomson Multimedia said: “These businesses fit perfectly with our Digital Media Solutions initiative. The advent of digital broadcasting and video over the Internet will soon require for content providers, broadcasters and network operators deployment of new end-to-end capability from the studio to the consumer devices. Complementing Thomson’s professional broadcasting solutions and Nextream Interactive Video Networks business, this move represents another step for serving this very promising market.”

This press release contains forward-looking statements regarding the proposed transaction between Philips and Thomson Multimedia and the prospects of the new entity that they intend to create. As noted above, the consummation of the transaction will be subject to the parties obtaining necessary regulatory approval, including the relevant merger authorities, and labor approvals. The prospects and success of the new company to be created by Philips and Thomson Multimedia will be subject to a number of factors, including market conditions, technological advancements, customers and employee acceptance, and the actions of competitors.

About Philips

Royal Philips Electronics of the Netherlands is one of the world’s biggest electronics companies and Europe’s largest, with sales of EUR 31.5 billion in 1999. It is a global leader in color television sets, lighting, electric shavers, color picture tubes for televisions and monitors, and one-chip TV products. Its 239,370 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors and medical systems. Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges.

About Thomson Multimedia

With sales of 6.7 billion Euros (U.S. $ 6.5 billion) in 1999 and 55,000 employees in more than 30 countries, Thomson Multimedia (Paris Sicovam: 18453) (NYSE: TMS), provides a wide range of technologies, systems, finished products and services to consumers and professionals of the entertainment and media industries. To enable its customers transition to digital the Group has five principal activities: Displays and Components, Digital Media Solutions, Consumer Products, New Media Services, and Patents and Licensing. Thomson Multimedia distributes its products under the popular Thomson and RCA brand names. For more information: Thomson