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Philips to acquire U.S. consumer manufacturer Gemini

Posted: 12 Jul 2004 ?? ?Print Version ?Bookmark and Share

Keywords:gemini industries? pc accessory? tv? dvd player?

Hustling to increase its presence in the fast-growing, high-margin consumer and PC accessory market, Royal Philips Electronics announced an agreement Wednesday (July 7, 2004) to acquire consumer electronics manufacturer Gemini Industries Inc. Philips declined to disclose financial details.

Philips is no stranger to the consumer accessory business. Over the last eight years, the company has already supplied its consumer accessory products to Gemini and licensed the Philips brand to Gemini. Of Gemini's 2003 sales totaling $200 million, 70 percent was generated by Philips brand-related products, according to a Philips spokeswoman.

Through the acquisition, Philips is aiming directly at the consumer and PC accessory distribution business. The company hopes to "increase its brand awareness in North America, expand its accessory product range and extend the geographical reach of its accessory products," the spokeswoman said.

Gemini, whose business has been predominantly based in North America, will be seeking to extend its reach to Europe under the new agreement.

The accessory market was valued at $7 billion in the United States last year. In contrast to consumer electronics systems such as TV receivers and DVD players, which have suffered from intense price pressure, consumer accessories such as headphones for A/V products along with PC accessories are maintaining high margins, and are growing faster than ever, according to Philips.

Details of Philips' integration plan for Gemini are still in development. A new integration team will finalize the plan within the next three months, according to the Philips spokeswoman. The impact on Gemini's 500 employees "will be minimum," she added.

Philips' North American consumer electronics operation, which has been losing money steadily, reached break-even in the fourth quarter of 2003.

The Gemini acquisition is subject to regulatory approval, which is expected by August 2004.

- Junko Yoshida

EE Times

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