Philips To Split into Two Companies – Lighting and HeathTech

Royal Philips NV, the Dutch electronics giant, announced Tuesday that it plans on splitting into two companies with one focusing on Lighting and the other combining its health and technology units. The decision to divide comes in an effort to sharpen strategic focus on its businesses.

Though Philips will spin off into two different companies, both the units will retain the brand name.

 "To become the global leader in HealthTech and shape the future of the industry, we will combine our vibrant Healthcare and Consumer Lifestyle businesses into one company. At the same time, giving independence to our Lighting solutions business will better enable it to expand its global leadership position and venture into adjacent market opportunities," Frans van Houten, chief executive officer of Royal Philips said in a statement adding that this was a decision in line with its panned transformation.

"Both companies will be able to make the appropriate investments to boost growth and drive profitability, ultimately generating significantly more value for our customers, employees and shareholders," he stated.

Philips first announced in July that it would be spinning off its electronics, lights and bulbs business into a separate company.

The Dutch company expects to save about $385 million in costs through the split. Both the companies will reportedly have a "lean management structure" that will be focused on quality and performance.

"Philips is uniquely positioned to help reshape and optimize population health management by leveraging big data and delivering care across the health continuum, from healthy living and prevention to diagnosis, minimally invasive treatment, recovery and home care," van Houten continued.

"The combination of our Healthcare and Consumer Lifestyle portfolios and the integration of the data from the connected products on Philips' cloud-based digital health platform illustrate our opportunity to capture growth in an increasingly connected world, where societies are looking for more effective and lower cost health solutions," he added.

Experts think this is a bold move for Philips and shows its commitment toward healthcare, according to Bloomberg.