Royal Philips Electronics today announced that it has signed the agreement to transfer its Television business into a joint venture with TPV Technology Limited. The new company will be 70% owned by TPV and 30% by Philips.

Closing of the deal, which is expected at the end of the first quarter of 2012, will take place after necessary merger clearance, governmental and TPV shareholder approvals are obtained.

"I am pleased that we have now signed the Television joint venture agreement with TPV. This agreement is important for both Philips and TPV and provides clarity to our consumers, trade partners and employees," said Philips Chief Executive Officer Frans van Houten. "This joint venture leverages the strengths of both companies to improve the position of Philips Television in the market. It enables Philips to focus on expanding market leadership positions across our Healthcare, Consumer Lifestyle and Lighting sectors."

The joint venture will be responsible for the design, manufacturing, distribution, marketing and sales of Philips' Television worldwide, with the exception of mainland China, India, United States, Canada, Mexico and certain countries in South America. As part of this transaction, the Philips Television innovation and manufacturing sites, commercial organizations, headquarters and employee base of 3,500 will be transferred into the joint venture.

Philips will grant the joint venture the right to use the Philips brand for an initial term of five years with an automatic renewal for another five years, subject to the joint venture meeting certain key performance indicators.