IR News

Amsterdam, June 11 2001: In Amsterdam today, Gerard Kleisterlee, President and Chief Executive Officer of Royal Philips Electronics (AEX: PHI, NYSE: PHG) and John Koo, Vice Chairman and CEO of LG Electronics (LG : KS 02610) signed a Definitive Agreement, through which the two companies will merge their respective cathode ray tube (CRT) businesses into a new joint venture company. The official presentation of the new company will be on July 5, in Hong Kong.

The 50-50 joint venture in display technology concerns all CRT activities including glass, and key components. With expected annual sales of nearly US$ 6 billion and approximately 36,000 employees, the new company will have a global leadership position in the CRT market.

Complementary Strengths and Synergy Potential

The merged entity is projected to benefit from the highly complementary strengths of the two companies:
- Philips' leadership in television tubes, and LG's leadership in monitor tubes;
- LG's geographical leadership in Asia, and Philips' strength in Europe, China, and the Americas;
- LG's industrial and manufacturing expertise and Philips' global marketing and technological innovation.
- Further benefits are expected in the areas of purchasing and research & development.

Under the terms of the agreement, LG and Philips will share equal control of the joint venture. The new company will be legally established in the Netherlands, with operational headquarters in Hong Kong. Philippe Combes, currently CEO of Philips Display Components, will lead the joint venture.