Philips and NEC to Form Joint Venture in Business Communications

As widely predicted by Comms Business Magazine (See news dated 281105) Philips and NEC have announced that they have signed a binding Memorandum of Understanding to form a joint venture in enterprise communications, by NEC taking a majority share in Philips’ Business Communications unit (PBC). The new company will be named “NEC Philips Unified Solutions”. Upon completion of the transaction, NEC will hold 60% and Philips 40% of shares.

A press announcement says that by combining NEC’s strong technology base and market position in Japan and North America, with Philips’ strong market presence in Europe, NEC Philips Unified Solutions will be able to strengthen its position in Europe in view of the fast technology changes in the modern telecom world.

The agreement involves all Philips Business Communications’ activities and businesses in EMEA, with a total workforce of approximately 900 people.

Philips and NEC have been cooperating closely for the last three years in a strategic partnership to jointly develop and deploy IP technology in enterprise communications. Since then both parties have leveraged their expertise to successfully address new opportunities in the IP communications market, further developing customer base and channels to market.

Speaking exclusively to Comms Business Magazine, Chris de Silva, UK Managing Director of Philips Business Communications said, “We have been working ever closer with NEC since we became strategic partners in 2003. This is the logical next step for both organisations and as a joint venture we will have the best of Philips and NEC combined.

Philips Business Communications has great coverage in Europe and a successful track record of selling NEC developed products. NEC’s strength in Japan and North America is perfectly complementary to our business. We will be one of the top global players in communications – able to deliver solutions across all geographic zones and markets.

What more could you ask for? Philips and NEC are both powerful international brands with excellent reputations for technology and innovation. This joint venture will be the ideal win-win for our customers, channel partners and employees.”

Kazuo Tsuzuki, Associate Senior Vice President of NEC’s Enterprise Solutions Operations stated: “This joint venture will strengthen NEC’s global position in the telecom market and we are expecting to grow sales of UNIVERGE solutions to the global customers on top of the continued sales of the Philips portfolio. It will support NEC’s growth ambition by using the strong market position of PBC in the European enterprise communications market.”

Commenting on the agreement, Harrie Brunklaus, CEO of Philips Corporate Investments said: “The combined strengths of NEC and Philips will offer NEC Philips Unified Solutions unique opportunities in developing a powerful portfolio of solutions and services, extending market reach and share of the business communications market in Europe.”

The transaction will be conditional upon regulatory approvals and is expected to be completed in the second quarter of 2006.