Philips is coming full circle. The Dutch company, which started in the late 19th century as an electric lighting company, is now spinning off several lighting units into a standalone company.

The as-yet-unnamed company, with an estimated value of $2.7 billion, will take the unit focusing on LED components — Lumileds, which sells LED components to OEMs for general lighting and display illuminations — as well as the auto lighting unit that provides head and taillight components to car-makers. BMW and Volkswagen are some of the automotive lighting clients.

“The combination of Lumileds and automotive lighting into a standalone company is the next logical step in our strategic and long-term vision for Philips Lighting,” director of communications Steve Klink told VentureBeat. He added that the new entity “will have increased flexibility to attract additional investors to attract more customers, accelerate growth and exploit scale.”

Why now?

“We have always said we would judge ownership of the LED components business in light of the industry evolution,” he told us. “By combining Philips Automotive lighting and Lumileds, the automotive lighting customers will continue to benefit from a fully integrated end-to-end R&D and supply chain, enabling the adoption of LED technology in automotive applications.”

The Philips Lighting businesses concentrating on LED luminaires, LED lamps, and connected lighting and services will remain with the parent company and are expected to be a major customer of the new organization.

The connected LED lighting systems and services, Klink said, include the LED installation that Philips is delivering for the Allianz Arena in Munich, which “will turn the façade of the building into basically one huge video screen” that combines LEDs and fixtures with software and controls. (See above.)

In addition to massive lighting displays, Philips is looking to become a leader in the new trend toward smart lighting.

The creation of the company is expected to be completed in the first half of next year, and the chief executive will be the present CEO of Lumileds, Pierre-Yves Lesaicherre.


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