Philips Electronics has reached an agreement in principle to sell its set-top box and connectivity solutions businesses to Pace Micro Technology in exchange for 70 million Pace Micro shares. The Philips activities are currently part of its Home Networks business unit within the Consumer Electronics division. The proposed transaction is subject to approvals from Pace shareholders, the relevant regulatory authorities and Philips' works council. After its successful completion, Philips will become a 23 percent shareholder in the combined business. The STB and CS businesses together employ approximately 335 people, predominantly based in France, who will transfer to Pace as part of the transaction. The remainder of Home Networks, Home Communications, which includes Internet Telephony and Home Telephony will become part of the Peripherals and Accessories unit within Philips' Consumer Lifestyle sector. The transaction is expected to close in the first quarter of 2008.
