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Elcoteq Acquires Philips' Flat Panel TV Manufacturing Operation in Mexico
Elcoteq Acquires Philips' Flat Panel TV Manufacturing Operation in Mexico. The acquisition includes certain fixed assets and inventories of Philips' Juarez manufacturing operation.
By: Judy Tsang
Stock Exchange Release
September 4, 2008 at 9:00 am (EET)
ELCOTEQ ACQUIRES PHILIPS' FLAT PANEL TV MANUFACTURING OPERATION IN MEXICO
Elcoteq SE has today signed and closed an agreement to purchase Philips' flat panel TV (FTV) assembly operations in Juarez, Mexico. The acquisition and related cooperation agreements further strengthen Elcoteq's position as a leading EMS company serving strongly growing FTV industry. The deal includes a long term cooperation agreement with Philips (NYSE-PHG, AEX:PHI) to provide manufacturing services to Philips for its Latin American FTV business and its PBS (Philips Business Services) business in the Americas and a long term cooperation agreement with Funai Electric Co., Ltd (TSE/OSE: 6839) to provide manufacturing services to Funai's FTV business in North America.
The acquisition includes certain fixed assets and inventories of Philips' Juarez manufacturing operation. The total consideration to be paid by Elcoteq in cash will amount to approximately MUSD 32. The current Philips personnel in Juarez, Mexico will continue in Elcoteq's organization. The plant currently has approximately 740 employees. Elcoteq will lease the required manufacturing space of approximately 20,000 square meters. Elcoteq will take over the Juarez unit immediately.
Elcoteq expects the net sales related to the deal to be on a level of MUSD 200 in 2008 (including LCD panels) and MUSD 250 in the following years (excluding LCD panels). The deal is expected to have positive impact on the company's Home Communications Business Area profitability already in 2008.
The acquisition provides Elcoteq with world class capabilities to offer final assembly services for FTVs as well as related engineering and new product introduction (NPI), supply chain management and sourcing services.
"We have a 12-year cooperation relationship with Elcoteq and are confident it is an excellent partner when we continue streamlining our global supply chain for FTV products," commented Rob de Ridder, Senior Vice President for Philips. "Our move to transfer the Juarez operation to an experienced and leading EMS company in this field was a logical step in optimizing our supply base in the FTV business."
According to Shinji Seki, President of AV Business Unit and Executive Officer of Funai Electric Co., Ltd, "We look forward to working together with Elcoteq to secure the high quality and cost competitive product supply to our customers in the region. We believe Elcoteq is a good EMS partner based on its flexible global operations network and comprehensive service offering."
"This acquisition significantly accelerates the development of our Home Communications business and service offering. This deal marks our entrance into complete final assembly of FTVs - a strategic product segment for us where we so far have provided printed circuit board assemblies and various subassemblies to our customers" says Vesa Keränen, President of Elcoteq Home Communications. Jouni Hartikainen, President and CEO of Elcoteq continues: "The Juarez deal strengthens our global partnership with Philips - and Funai, a leading Japanese supplier of FTVs and other audio-visual products, is a very welcome addition to our customer portfolio. "
Director, Investor Relations and Corporate Responsibility
Mr. Jouni Hartikainen, President and CEO, tel. +358 10 41 311
Mr. Vesa Keränen, President, Elcoteq Home Communications, tel. +1 469 212 6294
Mr. Mikko Puolakka, CFO, tel. +41 79 618 0302
Elcoteq SE is a leading electronics manufacturing services (EMS) company in the communications technology field. Elcoteq's global service offering covers the entire lifecycle of products, from product development to after-market services. By further combining mechanics expertise into its service offering, Elcoteq's vision is to be a leading integrated electronics manufacturing services (IEMS) company.
Elcoteq provides global end-to-end solutions consisting of product development services, supply chain management, NPI, manufacturing, and after-market services for the whole lifecycle of its customers' products. These products include Personal Communications products such as mobile phones and their parts, Home Communications products such as set-top boxes and electronics for flat panel TVs as well as Communications Networks products such as base-stations, tower-top amplifiers, and microwave systems.
Elcoteq operates in 15 countries on four continents and employs some 24,000 people. The Group's consolidated net sales for 2007 totaled 4.0 billion euros. Elcoteq SE is listed on the OMX Nordic Exchange Helsinki. For more information visit the Elcoteq website at www.elcoteq.com.
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Global electronics manufacturing services (EMS) company with design capabilities and focus in the communications technology field. It provides unique service offerings that integrate consistent contract services globally with customized solutions.