"With this agreement, we are creating the right set-up for the business to be successful in the extremely dynamic and competitive TV market," said Philips Chief Executive Officer Frans van Houten. "By giving TPV full control, they can drive synergies and act in a faster and more flexible way to changes in the market. Together with TPV, we remain committed to making the TV business a success, with a range of innovative Philips-branded TVs."
In 2011, Philips had transfered the 70% of its Television business into a joint venture with TPV Technology Limited. The brand license agreement the two companies had signed back then will remain in place, with an annual royalty of 2.2% of sales payable by TP Vision to Philips. The minimum annual royalty has been reduced from EUR 50 million to EUR 40 million. The agreement includes a EUR 50 million transaction-related payment, the effect of which Philips will account for in the fourth quarter of 2013.