Philips has announced it will be merging it's Lumileds LED components and automotive lighting divisions into a new separate business.
The company said that it's lighting division would remain a key customer for the new subsidiary but that it would be looking for third-party investers. Although, it did not rule out becoming a minority shareholder in the business.
This decision is part of Philips move from an electronics company to a healthcare and lighting business.
Lumileds is a manufacturer of high-powered LED lights, while the automotive lighting division sells light sources to carmakers and autoparts and repair stores. The two businesses had combined sales of about 1.4 billion euros in 2013.
The process of merging the two divisons into one business. which will be led by current Lumileds CEO Pierre-Yves Lesaicherre, is expected to be completed in the first half of 2015 and to cost Philips about 30 million euros in the second half of 2014.
Chief Executive of Philips, Frans Van Hourten, said: "As a stong standalone company they will have increased flexibility to attract investments and customers to accelerate growth and to exploit scale."