Philips has signed an agreement regarding the sale of WOOX Innovations, its Audio, Video, Multimedia and Accessories business, to Gibson Brands, Inc. Under the terms, Gibson Brands will pay $135 million and a brand license fee, relating to a license agreement for an initial period of 7 years. Philips expects the deal to close in the second half of 2014, subject to customary conditions, including regulatory filings and works council procedures.

Gibson Brands, based in Nashville, USA, has most recently invested in audio brands including Onkyo and TEAC as part of its ambition to become the global leader in music and sound. The latest transaction will leverage Gibson Brands' market presence in the U.S. and Japan, and WOOX Innovations' market strength with Philips-branded audio and home entertainment products in Europe, China, Latin America and other growth geographies.

"With this transaction, we are taking another important step in Philips' transformation to become a leading technology company in health and well-being," said Philips Chief Executive Officer Frans van Houten. "Philips and Gibson Brands have played significant roles in shaping the home entertainment and music industries and with this agreement the Philips brand will continue to be associated with innovative products in this space."

The Video business will stay with Philips until a transfer to Gibson Brands in 2017, related to existing intellectual property licensing arrangements.

WOOX Innovations, headquartered in Hong Kong with approximately 1,900 employees worldwide, is a global business driving the Philips brand in sound, home entertainment and related accessories.