FOR IMMEDIATE RELEASE

GIBSON BRANDS ANNOUNCES AGREEMENT TO ACQUIRE PHILIPS’ AUDIO AND HOME ENTERTAINMENT BUSINESS
Monday, April 28, 2014
Transaction Further Solidifies Gibson Brands Leadership Position and Ambition to Be the Largest Music and Sound Technology Company in the World
 
NASHVILLE, TENNESSEE – APRIL 28, 2014 – As part of its continued growth and diversification in the music and audio lifestyle arena, Gibson Brands, Inc. (www.gibson.com) today announced that it has signed an agreement with Royal Philips (NYSE: PHG, AEX: PHIA) to acquire WOOX Innovations, the audio, video, multimedia and accessories business of Philips. Under 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 7 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, based in Nashville, USA, 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 will 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.
 
“This agreement is the most significant step yet in Gibson Brands’ journey to become the largest music and sound technology company in the world,” said Gibson Brands chairman and CEO Henry Juszkiewicz. “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. I am thrilled to extend the reach of Gibson Brands around the world and to welcome this great team to the Gibson family.”
 
“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 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.
 
WOOX Innovations, headquartered in Hong Kong with approximately 1,900 employees worldwide, is a global and profitable business driving the Philips brand in sound, home entertainment and related accessories.
 
Gibson Brands celebrates 120 years in 2014, and is now one of the fastest-growing Consumer Electronics companies in the world.
 
For further information, please contact:
 
Elizabeth Caminiti
Gibson Brands
Tel: +1 615 310 9524
Email: elizabeth.caminiti@gibson.com
 
Mark Groves
WOOX Innovations Communications
Tel: +31653179850
Email: mark.groves@philips.com
 
About Royal Philips: Royal Philips (NYSE: PHG, AEX: PHIA) is a diversified health and well-being company, focused on improving people’s lives through meaningful innovation in the areas of Healthcare, Consumer Lifestyle and Lighting. Headquartered in the Netherlands, Philips posted 2013 sales of EUR 23.3 billion and employs approximately 115,000 employees with sales and services in more than 100 countries. The company is a leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as male shaving and grooming and oral healthcare. News from Philips is located at www.philips.com/newscenter.

About Gibson Brands:

Gibson Brands, the fastest-growing company in the music and sound industries, was founded in 1894 and is headquartered in Nashville, Tennessee. Gibson Brands is a global leader in musical instruments, consumer electronics, and professional audio, and is dedicated to bringing the finest experiences to consumers by offering exceptional products with world-recognized brands.

Gibson Brands has a portfolio of over 100 well-recognized brand names starting with the #1 guitar brand, Gibson. Other instrument brands include Epiphone, Dobro, Valley Arts, Kramer, Steinberger, Tobias, Slingerland, Maestro, Baldwin, Hamilton, Chickering and Wurlitzer. In professional audio, KRK Systems, TASCAM, Cerwin-Vega, Stanton, and Cakewalk also continue Gibson’s tradition of quality in their respective markets. Consumer electronics brands include Onkyo, Integra, TEAC, and Esoteric.

Gibson Brands recently expanded its reach into consumer markets with the acquisition of Philips' Home Entertainment based in Hong Kong—a company that invented the cassette tape, the CD format, the DVD format and the MP3 format. Under the Philips and Fidelio brand names, Gibson Brands continue to represent the ideal combination of innovation, tradition and a dedication to improving design while maintaining the highest level of craftsmanship.

A global company, Gibson Brands has manufacturing, marketing and research and development centers throughout the world.

All Gibson Brands are dedicated to innovation, prestige and improving the quality of life and music for its customers. Its goal is to provide the most exceptional customer audio products and experiences in the world.

Contacts:

Maureen O’Connor/Eileen Thompson-Ray/Joe Schneider
Rogers & Cowan
310-854-8116/310-854-8137/310-854-8140
moconnor@rogersandcowan.com        
ethompson-ray@rogersandcowan.com
jschneider@rogersandcowan.com