Philips will split the lighting business to form two independent companies

Reuters Amsterdam September 23 - The 120-year-old Philips said on Tuesday that it will split the company into two, to establish an independent lighting company, and to merge the consumer and healthcare sectors into a company valued at 15 billion euros.

The company said that the new company structure will bring about 100 million euros (about $12,846 million) in cost savings next year, and will further save 200 million euros in 2016. The company expects a restructuring expenditure of €50 million for 2014-2016.

According to Philips, this latest initiative will create two leading companies in the market - HealthTech and Lighting, both of which use the Philips brand.

In its revised performance outlook, Philips said that the adjusted earnings before interest, taxes, depreciation and amortization (EBITA) in the second half of 2014 are expected to be slightly lower than a year ago.

In the healthcare business, it is currently expected that the core business profit in the second half of 2014 will be lower than the core business announced in the second half of 2013.

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