Philips 2005 Annual Report Download - page 99

Philips Annual Report 2005 99
Acquisitions and divestments
The Company has an active approach to realigning its
portfolio of activities. Part of this approach is to actively
pursue acquisitions and disposals of activities.
During the year 2005, there were two key acquisitions
and seven main disposals. In total, EUR 1.2 billion was paid
for acquisitions, whereas more than EUR 3.4 billion was
received as a result of disposals.
An overview of the main acquisitions and divestments is
given below:
Impact of main acquisitions and divestments in 2005
in millions of euros
Recognized
gains
Cash
pay ments/
receipts
Acquisitions
Stentor − (194 )
Lumileds − (788 )
Divestments
Connected Displays (Monitors) 136 −
NAVTEQ 753 932
Atos Origin 185 554
TSMC 460 770
LG.Philips LCD 332 938
Great Nordic 48 67
Philips Pension Competence Center 42 55
Acquisitions
In the medical industry, healthcare IT company Stentor
was acquired, a leading provider of picture archiving and
communication systems used for storing, managing and
distributing digital radiology images throughout hospitals
and healthcare facilities. The Company believes that the
Stentor acquisition will strengthen the Company’s position
in the fast-growing healthcare IT market. Stentor will be
incorporated into the Healthcare IT business of the
Medical Systems division.
In Lighting, the existing interest in Lumileds Lighting was
increased by 47.25% to a controlling ownership of 96.5%,
with the remaining 3.5% still owned by an employee trust
company. The Lumileds acquisition will further strengthen
the Company’s position in the fast-growing solid-state
lighting market, opening up a range of new LED applications.
Divestments
In CE, the Company sold and transferred certain activities
within its monitors and entry-level fl at TV business to TPV.
The deal with TPV resulted in a EUR 136 million gain.
In the course of 2005, the Company further reduced its
stakes in fi nancial holdings. The sale of its 37.1% remaining
stake in NAVTEQ provided the Company with gross
proceeds of EUR 932 million and a non-taxable gain of
EUR 753 million. Also, the sale of the remaining Atos Origin
shares led to a gain of EUR 185 million and proceeds of
EUR 554 million.
The sale of a 2.6% stake in TSMC led to a gain of EUR 460
million and proceeds of EUR 770 million. The sale of
LG.Philips LCD shares resulted in a gain of EUR 332 million
with proceeds of EUR 938 million. The 3.1% remaining
stake in Great Nordic that was sold during 2005 provided
the Company with proceeds of EUR 67 million and a
non-taxable gain of EUR 48 million.
Furthermore, Philips’ pension asset management function
and pension administration were divested in 2005.
In 2004, the main acquisitions were Philips-Neusoft Medical
Systems and Gemini Industries, and the main divestments
related to the sale of shares of Atos Origin and NAVTEQ.
In 2003, the main investment was in a participating interest
in InterTrust Technologies, whereas a stake of 2.4% in
TSMC was sold.
For further details about acquisitions and divestments,
see note 2 to the consolidated fi nancial statements in this
Annual Report.