Philips Claims Breach of Contract by Funai; Terminates Agreement to Transfer Audio/Video Business
Oct 28, 2013
| Print this page
Royal Philips (Amsterdam) terminated its agreement with Funai Electric Co., Ltd. for the transfer of its Audio, Video, Multimedia and Accessories business, and claimed breach of contract by Funai. Philips said it will take legal action to recover damages caused by Funai.
Philips and Funai agreed on January 29, 2013, to transfer the Philips Audio, Video, Multimedia and Accessories business to Funai. Philips said that, following the signing of the agreement, it worked to prepare the business for transfer in the second half of 2013. Philips said that process was completed, but said Funai "refused to take the necessary steps to enable completion of the transaction and the transfer of the business."
Philips plans to start arbitration proceedings in the International Court of Arbitration (ICC).
Philips said it will investigate other opportunities for the Audio, Video, Multimedia and Accessories business, while continuing to run the business within Philips, operating with a significantly lower cost structure, as a standalone entity called WOOX Innovations.
“We regret that we have to take this action, but we do so to protect our business and the interests of all our stakeholders,” said Philips Chief Executive Officer Frans van Houten.
“Year to date, our carved-out Audio, Video, Multimedia, Accessories business shows a positive net income and has leading market positions in areas like home cinema sound, docking speakers and headphones.”
WOOX Innovation, as a standalone company within Philips, is headquartered in Hong Kong and has over 2,000 employees worldwide. The business has EUR 1.2 billion in sales.
Back to Breaking News