Gibson Brands Inc. acquires Philips' Woox Innovations

MUMBAI: American guitar maker Gibson Brands, Inc, has signed an agreement with Royal Philips to acquire WOOX innovations, in the attempt to diversify and grow in the music and audio lifestyle arena.
As per the terms of the agreement, Gibson Brands will pay $135 million and a brand license fee, relating to a license agreement for an initial period of seven years. The deal is expected to close in the second half of 2014, subject to customary conditions, including regulatory filings and works council procedures.
Gibson Brands chairman and CEO Henry Juszkiewicz said, "This agreement is the most significant step yet in Gibson Brands’ journey to become the largest music and sound technology company in the world. By acquiring Philips’ audio and home entertainment business, our goal is to continue to provide the most exceptional consumer audio products and experiences in the world."
"With this transaction, we are taking another important step in Philips’ transformation to become a leading technology company in health and well-being," said Philips chief executive officer Frans van Houten. "Philips and Gibson Brands have played significant roles in shaping the home entertainment and music industries and with this agreement the Philips brand will continue to be an innovation leader in this space."
The Nashville based company has in recent years invested in audio brands including Onkyo and TEAC as part of its ambition to become a global leader in music and sound. This transaction hopes to leverage Gibson Brands’ strong market presence in the U.S. and Japan, and WOOX Innovations’ market strength with Philips-branded audio and home entertainment products in Europe, China, Latin America and other growth geographies.
The video business will stay with Philips until a transfer to Gibson Brands in 2017. Until that time, a distribution agreement will be in place, whereby WOOX Innovations will be fully responsible for the marketing and sales of Philips-branded optical video products.
Hong Kong headquartered WOOX Innovations- audio, video, multimedia and accessories business of Philips has approximately 1,900 employees worldwide.