Philips says to spin off lighting branch in 'historic' IPO

Electronics giant Philips announced Tuesday it was floating its lighting arm on the stock market in a "historic" initial public offering, aiming to spin off at least a quarter of the division's shares. "The offering would consist of a sale of existing shares only held by Royal Philips, the current sole shareholder of Philips Lighting. The offering and listing, and their timing, are subject to, among other factors, market conditions," the Amsterdam-based Philips said in a statement. Philips in late 2014 announced it was selling off its core lighting business -- a mainstay of its income for more than a century -- to focus more on medical equipment. But since then Philips said it has been examining its options, hesitating between a straight sale and an IPO. Philips said it would retain the majority stake in the lighting arm "with the aim to fully sell down over the next several years" as it shifts its focus to healthcare products. "Today's announcement is a historic one for Philips as we aim to separate our company into two market-leading companies focused on capturing opportunities in the health technology and connected LED lighting solutions markets respectively," Philips chief executive Frans van Houten said in the statement. Philips sold its first light bulb a few years after it was founded in 1891, but for the past dozen years has increasingly shifted its focus on medical equipment, which now accounts for more than 40 percent of sales. A household name around the world for home appliances, Philips said in April it had earned 37 million euros ($41.5 million) in net income for the first quarter, compared with 100 million euros in the same period in 2015. The group however in January announced net profit in 2015 up by 55 percent to 645 million euros compared to 415 million euros in 2014.