Philips enters into joint venture to create Saudi lighting player

Royal Philips, a global leader in lighting, Monday announced that it has entered into agreements to acquire 51 percent of General Lighting Company (GLC), a major lighting company in Saudi Arabia from a consortium of shareholders that include Alliance Holding Ltd. (Alliance), the Hejailan Group and the Carlyle Group.
The joint venture will be a major lighting player in the Kingdom, the largest economy in the Middle East by GDP. It will provide a full range of LED lighting solutions and strengthen Philips’ footprint in the region, while creating growth opportunities in sustainable technologies to support the government’s objective to reduce energy consumption.
It will also bring together Philips expertise in LED technology and the benefits of its global supply base with GLC’s deep local market knowledge and strong commercial capabilities. The Saudi lighting market is forecast to grow substantially in the period 2014-2018, driven by targeted spending on construction, and government and private investments in energy-efficient lighting initiatives.
Under the terms of the agreements, Philips will acquire 51 percent of GLC for a total amount of $235 million (on a cash-free, debt-free basis) plus additional transaction costs.
Philips’ current lighting activities in the Kingdom will be combined with GLC forming the joint venture that will be named Philips Lighting Saudi Arabia. Alliance is the holding company managed by Abdullah Al-Hobayb, founder and chairman of GLC, and will be the JV partner with a 49 percent stake.
“By partnering with GLC, Philips will be able to grow its business in this important market, particularly in relation to LED lighting,” said Eric Rondolat, CEO of Philips Lighting.
“By partnering with Philips, GLC will benefit from ‘best in class’ lighting innovations and from an extensive lighting know-how and services,” said Abdullah Ibrahim Al-Hobayb, chairman of GLC group.”